China Desk
News
Investigation by Select Committee on the CCP, House Homeland Finds Potential Threats to U.S. Port Infrastructure Security from China
September 12, 2024 – Select Committee on the Chinese Communist Party Chairman John Moolenaar (R-MI), House Committee on Homeland Security Chairman Mark E. Green, MD (R-TN), and Subcommittee on Transportation and Maritime Security Chairman and Select Committee Member Carlos Gimenez (R-FL) unveiled a joint investigative report exposing a rising threat to U.S. economic and national security posed by the Chinese Communist Party (CCP). Read the full report HERE.
Chairman John Moolenaar (R-MI) of The Select Committee on the Chinese Communist Party released the statement below following reports that a Chinese social media influence operation posed as American voters and pushed divisive messaging ahead of the presidential election in November.
September 4, 2024 – “The Chinese Communist Party has previously used TikTok to censor the news Americans read and attempted to manipulate Taiwan’s presidential elections earlier this year. It’s no surprise the CCP is now using fraudulent social media accounts to target our upcoming elections. We encourage social media companies to expose the CCP’s propaganda campaign and take action against CCP bots that are trying to deceive Americans.”
Former High-Ranking New York State Government Employee Charged with Acting as an Undisclosed Agent of the People’s Republic of China and the Chinese Communist Party
September 3, 2024 – In federal court in Brooklyn, an indictment was unsealed charging Linda Sun with violating and conspiring to violate the Foreign Agents Registration Act (FARA), visa fraud, alien smuggling, and money laundering conspiracy. Sun is alleged to have acted on behalf of the government of the People’s Republic of China (the “PRC”) and the Chinese Communist Party (the “CCP”). Sun’s husband and co-defendant Chris Hu was also charged with money laundering conspiracy, as well as conspiracy to commit bank fraud and misuse of means of identification.
Note: As predicted earlier this year, the US Department of Justice has continued to ramp up enforcement of the Foreign Agents Registration Act and related political laws through criminal prosecution.
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Introduction
Organizations face needs and constraints when conducting business in or with China. Protectionism, industrial espionage, and IPR infringement are the most common concerns, and their impact on an organization’s international business operations can be substantial. Whether engaged in joint ventures, wholly foreign-owned enterprises, manufacturing or distribution agreements, the loss of business, revenue, reputation and competitive advantage caused by these issues affects businesses both at home and in their core export markets. In addition, the inadequate protection of intellectual property can cause irreparable commercial harm.
Underpinning the commercial landscape for organizations operating in China is the country’s attempts to attain a dominant position in international markets through a combination of industrial, research and innovation, trade and foreign direct investment policies. China is set to release an ambitious plan to write global standards for the next generation of technology, a move that could have enormous implications for tech industries worldwide. The “China Standards 2035” plan will lay out a blueprint for China’s government and leading technology companies to set global standards for emerging technologies like 5G internet, the Internet of Things (IoT), and artificial intelligence, among other areas. It will work in concert with China’s other industrial policies – namely the controversial “Made in China 2025” strategy.
China’s “Made in China 2025” strategy is intended to enable the country to become a world leader in 10 key industrial sectors. To achieve this end, China has and will continue to seek ways to facilitate strengthened domestic innovation capacity in order to reduce its reliance on foreign technologies. China has developed an advantageous combination of productivity-enhancing investments and technology transfer from foreign sources while exploiting sheltering framework conditions.
“China’s Dream”, a slogan coined by Xi Jinping since his election as CCP Secretary General and Chair of the Central Military Commission at the 18th Party Congress in November 2012, achieved instant currency, both domestically and abroad. As generally understood, China’s dream is a vision of the future that has a realistic chance of achievement. The 100th Anniversary of the People’s Republic of China will be in October 2049, whether or not the PRC then still exists in its present form. Immediately after becoming China’s leader, Xi specified deadlines for meeting his “ Centennial Goals”, including: “China will become a fully developed, rich, and powerful nation by the 100th anniversary of the People’s Republic in 2049” (meaning, China be the world’s next superpower, the new “number 1” in 2049).
It’s not clear how China will get there by the middle of this century. In Chinese eyes, 1949 marked a new dawn, the end of the “era of humiliation.” In the words of Mao Zedong’s inaugural speech, “the Chinese people have stood up; never will China be humiliated again”, but China now faces tremendous challenges such as fostering innovation, dealing with ageing problem and coping with a less accommodative global environment. Also, how should the financial system be transformed in order to continuously support economic growth and keep financial risks under control? What fiscal reforms are required in order to balance between economic efficiency and social harmony? What roles should the state-owned enterprises play in the future Chinese economy? In addition, how will technological competition between the United States and China affect each country’s development? What will be China’s role in the international economic institutions? And will the United States and other established powers accept a growing role for China and the rest of the developing world in the governance of global institutions such as the World Trade Organization and the International Monetary Fund, or will the world devolve into competing blocs?
China’s 14th Five-Year Plan (translated by CSET), which was passed by the National People’s Congress in March, 2021, covers the years 2021-2025. Although the Five-Year Plan contains relatively few quantitative targets, it details a vast array of near-term PRC economic, trade, S&T, defense, political, social, cultural, environmental, and other policy priorities. The 14th Five-Year Plan differs from past plans in that it also includes a short section on “long-range objectives” for 2035. Note that although the document is an “outline,” the PRC government has labeled the longest and most authoritative full versions of previous five-year plans it released as “outlines” as well. The Chinese source text is available online (warning: you can access the site only after disconnecting from your VPN; all of your internet traffic becomes visible to your ISP, and the website(s) you visit also see your real IP address, which is tied to your physical location).
An archived version of the Chinese source text is available here. A policy research organization within Georgetown University’s Walsh School of Foreign Service, the Center for Security and Emerging Technology (CSET) produces data-driven research at the intersection of security and technology, providing nonpartisan analysis to the policy community.
The Belt and Road Initiative (BRI) poses a significant challenge to U.S. economic, political, climate change, security, and global health interests. Since BRI’s launch in 2013, Chinese banks and companies have financed and built everything from power plants, railways, highways, and ports to telecommunications infrastructure, fiber-optic cables, and smart cities around the world. If implemented sustainably and responsibly, BRI has the potential to meet long-standing developing country needs and spur global economic growth. To date, however, the risks for both the United States and recipient countries raised by BRI’s implementation considerably outweigh its benefits.
BRI was initially designed to connect China’s modern coastal cities to its underdeveloped interior and to its Southeast, Central, and South Asian neighbors, cementing China’s position at the center of a more connected world. The initiative has since outgrown its original regional corridors, expanding to all corners of the globe. Its scope now includes a Digital Silk Road intended to improve recipients’ telecommunications networks, artificial intelligence capabilities, cloud computing, e-commerce and mobile payment systems, surveillance technology, and other high-tech areas, along with a Health Silk Road designed to operationalize China’s vision of global health governance. Hundreds of projects around the world now fall under the BRI umbrella. (CFR’s Independent Task Force Report No. 79 “China’s Belt and Road: Implications for the United States”).
Having celebrated the end of the first decade of his signature foreign policy at the Belt and Road Forum in October 2023, Xi Jinping has wasted little time in doubling down on China’s global economic ambitions. On November 29, 2023, a follow-up document was released in Beijing to map out China’s goals of the Belt and Road Initiative for the coming ten years.
BRI 2023 Updates:
The Economist: The path ahead for China’s Belt and Road Initiative / Council on Foreign Relations: Why Is Italy Withdrawing From China’s Belt and Road Initiative? / European Parliament: The Global Gateway: Taking stock after its first year / Fortune: The Ukraine war has exposed Europe’s reliance on Russia’s railways for trade with China—including for the defense industry / Wall Street Journal: China’s Belt and Road Plan Is Down, Not Out / Belfer Center for Science and International Affairs: The Belt and Road Initiative in Europe: Opportunities for a Transatlantic Response Amid the Russian Invasion of Ukraine / China Global Competition Tracker Special Edition (MERICS): How China’s Belt and Road projects are shaping global trade and what to expect from the initiative in its second decade
Services
Risks associated with BRI projects include political and environmental concerns, but there are also risks of increased illicit trade, corruption, and crime (….).
Next to assisting law firms dealing with BRI issues/disputes, GTAC provides services such as the following to help organizations navigate this challenging environment:
- Various Trade Compliance Services
- Theft of IP/Trade Secret Investigations
- Due Diligence Investigations
- Monitoring Regulatory Compliance
- Pre and Post-Employment Screening & Background Checks
For more details, please use this form to contact our Senior Consultant Export Controls or our Chief Executive Officer
Additional Information:
China Webinar
The GTAC “China Webinar” is a periodical gathering of attorneys, security experts, export control specialists and intelligence professionals.
The date of our next (private) webinar will not be published on this website, but we will send out invitations. You must register or subscribe for the webinar. You can do this by clicking a link that takes you to the webinar-landing page, where you will find a form that you can use to register. After filling in the form and submitting your details, you should get a confirmation email thanking you for registering for the webinar.
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Our webinar will provide a means for attendees to interact and participate during the event. We allocate time for Question and Answer sessions, and we have live chats for enhanced interaction between attendees and speakers, as well as between attendees and their fellow attendees.
Please note: our Private webinars can only be attended by people who are given access to them.
Knowledge Repository
Clients and prospective clients, please contact us if you wish to receive up-to-date information regarding:
- China’s Repression of Uyghurs in Xinjiang
- China’s Expanding Surveillance State
- China’s Intelligence Services and Espionage Operations, and
- Other Articles, Reports and Official Statements (years 2023, 2022, 2021 and 2020).
June 10, 2024 – China, the Illiberal Counter-Order, and the Role of Values in the Strategic Response, an article written by: R. Evan Ellis, PhD, a Senior Fellow at the Jack D. Gordon Institute for Public Policy as well as a Research Professor at the U.S. Army War College Strategic Studies Institute. The views expressed in this article are strictly his own.
June 2024 – Report by MERICS & Rhodium Group: Hungary emerges as main destination of Chinese investment in Europe. In 2023, Hungary received 44 percent of all Chinese foreign direct investment (FDI) in Europe, overtaking the “Big Three” economies Germany, France and the UK as the main recipient. Hungary was a key recipient of investment in the electric vehicle (EV) sector, which attracted over two thirds (69 percent) of Chinese FDI in Europe. Overall, Chinese FDI in the region slipped further to EUR 6.8 billion and reached the lowest level since 2010.
February 8, 2024 – COMMITTEE REPORT: American Venture Capital Firms Investing Billions into PRC Companies Fueling the CCP’s Military, Surveillance State, and Uyghur Genocide.
Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (CCP) unveiled the findings of their bipartisan investigation into five U.S. venture capital firms. The lawmakers found that these firms invested at least $3 billion in, and provided expertise and other benefits to, People’s Republic of China (PRC) critical technology companies, including many aiding the Chinese military, surveillance state, or the CCP’s genocide in Xinjiang.
The five firms used as case studies in the investigation are 1) GGV Capital, 2) GSR Ventures, 3) Qualcomm Ventures, 4) Sequoia Capital China, and 5) Walden International. Chairman Gallagher and Ranking Member Krishnamoorthi uncovered that these firms funneled over $1.9 billion to AI companies that support China’s human rights abuses or military, and at least another $1.2 billion into the PRC’s semiconductor sector– including semiconductor companies that advance the CCP’s military, genocidal, and techno-totalitarian ambitions. The report also highlights other investments that may raise significant security or human rights concerns.
Background: In July 2023, Chairman Gallagher and Ranking Member Krishnamoorthi launched
February 13, 2024 – Chinese Companies Listed on Major U.S. Stock Exchanges (Update)
The U.S.-China Economic and Security Review Commission released a regular update to its list of Chinese companies listed on the New York Stock Exchange, NASDAQ, and NYSE American, the three largest U.S. stock exchanges. As of January 8, 2024, there were 265 Chinese companies listed on these U.S. exchanges with a total market capitalization of $848 billion. That valuation is down from the start of 2023, when this table tracked slightly fewer Chinese companies, 252, listed on U.S. exchanges with a total market capitalization of $1.03 trillion. Since January 2023, 24 Chinese companies have listed on the three U.S. exchanges, raising $656 million in combined initial public offerings (IPOs).
February 16, 2024 – China’s overseas police stations: An imminent security threat?
Between 2016 and 2022, four local Chinese public security bureaus reportedly established 102 overseas police service stations in 53 countries across North and South America, Europe, Africa, and Asia, according to Brookings Commentary. Citing reports on these stations released by human rights NGO Safeguard Defenders, authorities in the United States, Canada, the United Kingdom, the Netherlands, and 10 other countries all launched investigations into these outposts. Concerns about these overseas police stations were amplified by evidence of China’s foreign interference operations and intimidation of overseas critics. Are fears of these stations warranted? What are the stations’ origins and operations and their links to transnational repression? In responding to these stations, democratic governments need to confront the broader problem of transnational repression. This will require earning the trust of diaspora communities, training law enforcement, and providing support to victims of Chinese state transnational repression.
March 20, 2024 – Gallagher, Bipartisan Lawmakers Call for New Restrictions and Tariffs to Protect Against Threats Posed by Chinese Drones
Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party today wrote to the Biden administration, calling for immediate action to counter the malign trade actions of drone manufacturers in the People’s Republic of China (PRC). Companies like DJI and Autel Robotics receive immense subsidies from the Chinese government, enabling Chinese drone makers to overtake 77 percent of the U.S. hobby drone market and over 90 percent of the U.S. commercial drone market. In the letter to Secretary of Commerce Gina Raimondo, Secretary of Homeland Security Alejandro Mayorkas, and U.S. Trade Representative Katherine Tai, the lawmakers called for higher tariffs on Chinese drones, stronger enforcement against PRC drone manufacturers using third countries to evade tariffs, and restrictions on U.S. federal funds being used to purchase Chinese drones. The lawmakers also note the national security risks posed by Chinese drones collecting U.S. data for use by the PRC military and intelligence services.
March 27, 2024 – Jamestown Issue Brief: TikTok, A Threat to US National Security
TikTok is a powerful tool for manipulating mass sentiment in the hands of a company that actively cooperates with and is subject to the coercive power of the Chinese Communist Party (CCP). The CCP has the intent and capability to, as well as a history of, manipulating information on a mass scale. The Party’s ability to leverage TikTok directly for its own ends distinguishes the platform from the platform’s US-based social media rivals. TikTok and its parent company, ByteDance, have no practical means, legal or otherwise, to resist the CCP’s pressure. Only solutions that separate the company from the CCP will protect US national security.
Key Points:
- ByteDance is a company domiciled in the People’s Republic of China (PRC) with its own party committee and is tied to the party-army-state, to which it has a host of obligations and is subject to strong coercive state power.
- The CCP has the intent and capability to, as well as a history of, trying to manipulate narratives and information to undermine adversaries and achieve strategic advantages.
- TikTok is responsible for and capable of manipulating sentiment on a mass scale. The social media platform—and conceivably other PRC apps, including mobile games and e-commerce platforms—can be used to intentionally manipulate how people feel. This could influence US citizens’ views on topics based on the CCP’s preferences.
- TikTok may have acted illegally in its handling of users’ data and conducted other malicious activities, such as tracking journalists. Leaks have highlighted the lack of separation between ByteDance and TikTok at the operational level.
Q4, 2023
October 19, 2023 – The Department of Defense released its annual report on the “Military and Security Developments Involving the People’s Republic of China (PRC).”
The report is known as the China Military Power Report (CMPR).
October 25, 2023 – A new report from the Changing Character of War Centre.
The CCW is an Interdisciplinary research centre for the study of change in armed conflict. They are part of the University of Oxford, based at Pembroke College and the Department of Politics and International Relations. Their new report (October 25, 2023): “Contractors and Contiguity: Assessing China’s Private Security presence in Kyrgyzstan”, covers: 1) The Chinese Private Security Industry, 2) Chinese PSCs Overseas, 3) China’s Political and Economic Interests In Kyrgyzstan, and 4) there’s a Bibliography with appr. 120 articles.
November 30, 2023 – The Asia Society Policy Institute, a think tank, launched a mobile version of “Decoding Chinese Politics“.
It’s an interactive website that helps decode the “black box” of Chinese politics.
November 30, 2023 – the U.S.-China Economic and Security Review Commission updated its publication, PRC Representation in International Organizations.
The publication identifies citizens of the People’s Republic of China serving in top leadership positions in a variety of key international organizations, including the UN and WHO, among others. The Commission’s work on this subject is informed by the enduring relevance to the Commission’s charter regarding the nature and implications of Chinese participation in international governmental organizations.
December 1, 2023 – MERICS China Global Competition Tracker Special Edition: “How China’s Belt and Road projects are shaping global trade and what to expect from the initiative in its second decade“.
You can download the PDF here.
December 7, 2023 – Update on China’s Position on Russia’s Invasion of Ukraine. The U.S.-China Economic and Security Review Commission updated its tracker of the key actions and statements summarizing China’s official position on Russia’s unprovoked invasion of Ukraine, which began on February 24, 2022. The timeline includes China’s major official government statements, press conferences, messages to the international community, key media publications, and where available, leaked internal Chinese Communist Party (CCP) guidance for media and propaganda outlets. A brief list of key China-Russia interactions in the year leading up to the invasion of Ukraine is appended.
December 12, 2023 – The House Select Committee adopts nearly 150 policy recommendations. The House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, led by Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL), adopted nearly 150 policy recommendations in a bipartisan report that outlines a strategy to fundamentally reset the United States’ economic and technological competition with the People’s Republic of China. Members of the Select Committee spent the past year investigating the CCP’s decades-long campaign of economic and technological warfare. The members define three key pillars that inform each recommendation and the United States’ path to correct 30 years of misguided policy:
- RESET: Reset the Terms of Our Economic Relationship with the People’s Republic of China.
- PREVENT: Stem the Flow of U.S. Capital and Technology Fueling the People’s Republic of China’s Military Modernization and Human Rights Abuses
- BUILD: Invest in Technological Leadership and Build Collective Economic Resilience in Concert with Allies
Regarding foreign investment, the Committee deemed the regulatory approach of the Committee on Foreign Investment in the United States (CFIUS) insufficient to address the PRC’s Military-Civil Fusion and proposed several specific updates.
Read the Select Committee’s full report, ‘Reset, Prevent, Build: A Strategy to Win America’s Economic Competition with the Chinese Communist Party’ here.
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Recommended books for understanding China are listed here.
Recommended China Centers at Think Tanks and Universities: MERICS – ASPI – CSIS – CSIS – Stimson – Brookings – Stanford – FPRI – CNAS – COG – CRG
Regarding the country’s Big Data Plan, this January 23, 2023 document, translated by CSET describes, in broad strokes, the Chinese Communist Party’s guidelines for how “big data” can be used to spur economic development. It emphasizes data sharing, but also calls for restrictions on the sharing of classified and personally identifiable information. The document also urges the breaking up of “data monopolies” and warns that China will reciprocate if subjected to data export controls by foreign countries.
The issue of the Human Freedom Index 2022 (copublished by the Cato Institute and the Fraser Institute) shows that global human freedom deteriorated severely in the wake of the coronavirus pandemic. Most areas of freedom fell, including significant declines in the rule of law; freedom of movement, expression, association and assembly; and freedom to trade. The HFI covers 165 jurisdictions, China’s Freedom Rank: 152. Explore the report here.
Regarding China’s Global Police State, the U.S.-China Commission released a report entitled, “China’s Global Police State: Background and U.S. Policy Implications,” summarizing China’s global campaign to silence its critics. Read the full staff research report here.
