China’s New Law Extends Xi’s Combative Foreign Policy Stance Law assembles tools on retaliatory curbs, foreign investment Chinese leaders struggling to respond to slew of US curbs China Targets ‘Western Hegemony’ With New Law By Bloomberg News 29 June 2023 https://www.bloomberg.com/news/arti...eign-relations-law-targeting-western-hegemony China has passed a sweeping foreign policy law that bolts together a slew of existing tools to counter Western powers, and extends President Xi Jinping’s combative stance on asserting Beijing on the world stage. Enacted with the stated intention of safeguarding China’s national security and development interests, theLaw on Foreign Relationsstops short of creating new mechanisms for responding to rising geopolitical challenges, such as US-led export controls on advanced technology. Instead, the umbrella legislation gives Beijing’s existing toolkit more weight by embracing it in a legal document alongside two of Xi’s signature foreign policy initiatives. Both the Global Security Initiative and Global Civilization Initiative are baked into the law, approved by the standing committee of the National People’s Congress on Wednesday. The US has singled out a range of Chinese companies and officials with sanctions, accusing them of involvement in human rights abuses that China denies. Last October, the Biden administration also tightened restrictions on US microchip exports to China — controls the Biden administration is now considering strengthening further. China is refusing to resume high-level communication with American armed forces until Washington lifts sanctions on Chinese Defense Minister Li Shangfu. While the law is directed at government agencies, it states the conduct of foreign relations falls under the leadership of the Communist Party. Xi has enhanced the party’s grip on government bodies in recent years as he consolidates power in the world’s second largest economy. China’s top diplomat, Wang Yi, called the law “an important measure to strengthen the Communist Party Central Committee’s centralized and unified leadership over foreign affairs,” in an editorial Thursday in the Communist Party mouthpiece People’s Daily. Suisheng Zhao, a professor at the Josef Korbel School of International Studies, University of Denver, said the document is more like Xi’s foreign policy declaration than a new legislation. “It’s a personalization of Chinese foreign policy through a legal process,” said Zhao. The law “makes so clear that the party is in charge of foreign policy, and the foreign ministry and State Council is the implementing institution.” Blunt Tools Xi has struggled for years to find a response to US sanctions, tariffs and export controls that makes China look tough without scaring off foreign companies. While Beijing has developed an “unreliable entity list,” an anti-foreign sanctions law, and Hong Kong’s national security law, their provisions to punish people for complying with foreign sanctions haven’t been used to any meaningful degree. Beijing’s decision earlier this year to putLockheed Martin Corp.and a subsidiary ofRaytheon Technologies Corp.on the entity list, for example, was largely symbolic: The two US defense contractors don’t have significant business in China. China’s most meaningful action came last month, when it banned domestic operators of key infrastructure from buyingMicron Technology Inc.’s products, a cautious move as replacements for the company’s memory chips are easily sourced from local suppliers. Beijing has also sanctioned individuals, including former US Secretary of State Michael Pompeo in recent years, who have few, if any, ties to the Chinese economy. Further signaling the challenges facing Xi in responding to US curbs, China’s top legislative body has postponed a proposal to impose an anti-sanctions law on Hong Kong. Business leaders in the finance hub raised concerns the law could allow Beijing to seize assets from entities that implement US sanctions. Financial institutions in Hong Kong are reliant on the dollar and comply with Washington’s economic measures. Beijing has similarly avoided violating US sanctions over Russia’s war in Ukraine, wary of blowback on its own economy and companies.
Trade wars OPINION China is threatening to use its major trade weapon Stephen Bartholomeusz Senior business columnist July 4, 2023 https://www.smh.com.au/business/mar...e-its-major-trade-weapon-20230704-p5dlk1.html latest efforts by the US and the European Union to restrict its access to a key building block for technological supremacy. After the Netherlands introduced a licensing regime for exports of the machines needed to produce the most advanced semiconductors on Friday, and amid reports that the US is again about to tighten its restrictions on exports of advanced chips to China, China’s Ministry of Commerce on Monday announced its own export restrictions. Two key metals used in chip making, gallium and germanium, will now be subjected to export restrictions to “safeguard national security and interests”, the ministry said. Some applications for exports will need to be reviewed by China’s State Council, it said. Xi Jinping’s regime has used China’s dominance of strategic minerals as leverage in the past.CREDIT:BLOOMBERG China dominates the limited production of both metals, accounting for more than 90 per cent of the world’s supply of gallium and more than 80 per cent of the market for germanium. These are highly strategic metals on the critical raw materials lists of the US, European Union, Australia and India. Each of those countries has developed its own list this year as they seek to shore up their supply chains for strategic resources and diversify away from an over-reliance on China. Gallium is used in the advanced, high-performance chips used in mobile phones and electric cars, along with a host of other commercial and military applications. Germanium is used to upgrade the performance of silicon and is used in fibre optics and solar cells, among other applications. There’s an element of mutually assured destruction if China fires the big gun – the dominance it has in a range of strategic raw materials – in its trade war arsenal. The metals aren’t rare, but relatively low prices and China’s dominance of their production – as part of a decades-long strategy to dominate critical minerals that has involved direct and indirect subsidies – has pushed most of the potential alternative producers out of the markets. (Most gallium is a byproduct of alumina and zinc refining. Australia was briefly a gallium producer in the early 1990s, exporting the material to France from a French-owned plant close to Alcoa’s Pinjarra alumina refinery but, amid a global glut, the plant was closed down after only a year.) China’s decision to put the metals on the list of exports requiring permits isn’t unexpected. It has always been obvious that the only significant response China could make to the US-led attempt to throttle its access to the advanced chips critical to most advanced commercial and military technologies was to use its dominance of a range of critical minerals as leverage. Withholding supply Implicit in the decision to create a licensing regime for some critical metals is the threat of withholding their supply. It may, or may not, be a coincidence, but the announcement of the export curbs was made just ahead of Thursday’s arrival in China of US Treasury Secretary Janet Yellen. Yellen is seeking to take some of the heat out of the relationship between the US and China and to reassure Chinese officials that the US is looking to de-risk its supply chains rather than completely decouple its economy from China’s. The export curbs were announced just ahead of Thursday’s arrival in China of US Treasury Secretary Janet Yellen.CREDIT:AP China has signalled that it wants to open a discussion on export controls, which at the moment are quite one-sided given that China has few options – other than threatening to cut off access to strategic raw materials – for countering the restrictions on exports of strategic technologies imposed by the US and an expanding range of US allies. China has used its dominance of strategic minerals as leverage in the past, weaponising its control of rare earths, for instance, in territorial disputes with Japan, and has hinted at deploying that dominance in its wider trade disputes with the US. In the near term, while shutting down US and/or European access to strategic metals like gallium and germanium would damage Western countries’ semiconductor industries and their ability to create advanced chips for commercial and military applications, it could also damage China’s own industries by inviting even more trade sanctions. There’s an element of mutually assured destruction if China fires the big gun – the dominance it has in a range of strategic raw materials – in its trade war arsenal. The longer-term risk for China is that over-playing its hand will ultimately see that dominance threatened by encouraging alternate sources of supply. Australia’s reserves Joe Biden’s Inflation Reduction Act is partly aimed at doing just that, offering major subsidies and tax incentives in an attempt to boost the supply of what’s needed for clean energy and other technologies from US domestic producers and from trusted allies such as Australia. Australia has reserves of many of the critical minerals on America’s list (and of the list that the EU produced in March) and is well-placed to supply them. It will probably require some form of subsidies if Australia, or other non-China producers of rare earths or strategic metals like gallium and germanium, are to compete with China, which has the scale, the low-cost base and its own subsidies to keep prices relatively low and price others out of the market. The markets for metals like gallium are small, but they are growing rapidly as the sales of chips using the metals explode over the next decade. The volume of chips using gallium, for instance, is expected to be about eight times larger at the end of this decade than it was at the beginning. If China were to immediately shut off access to gallium and germanium, it would have a significant impact on the near-term ability of the US and others to produce advanced semiconductors, at least in the volumes anticipated. In the longer term, access to supplies from non-Chinese producers would almost inevitably result in higher-cost supply, although the expected steep increases in demand would have an impact on price and on the viability of non-Chinese production regardless of any Chinese restrictions on exports. The next few years are going to be tricky as the US, Europe and their allies seek to reduce their dependence on China for strategic resources. China will want to try to protect positions in key resources that it has been building for decades and which give it a level of countervailing power in trade confrontations with the US. After the pandemic exposed global supply chain vulnerabilities and the Russian invasion of Ukraine highlighted the risk of over-dependence on a single supplier, however, there are irresistible arguments for diversification of the supply chain for resources deemed critical to national interests, regardless of the friction that the process generates.
just the beginning. germanium has uses in solar and fiber optics. gallium is used for radio frequency chips. but both are not found naturally, so a company may have the know-how to produce, it can’t just make it without raw material, which are not profitable, e.g. zinc spot price. qcom and appl can get the sources for their mobile chips for sure, ba, lmt, noc, rtx maxr may not for its satellite chips.
Interesting read. Maybe the U.S. should not make payments on our debts to China until China pays out on the debt it owes to the U.S. The U.K. forced China to do this as part of the Hong Kong agreement -- the U.S. should adopt a similar stance and either demand payment or subtract the money from the payments made to China on U.S. debt. China is in default on a trillion dollars in debt to US bondholders. Will the US force repayment? https://thehill.com/opinion/interna...o-us-bondholders-will-the-us-force-repayment/
https://asiatimes.com/2019/09/taiwan-says-it-wont-pay-century-old-debt-to-us/ Old story, new print. As long as ROC in Taiwan is still in existence, wrong place to bring suit.
https://www.nytimes.com/1987/06/08/business/china-britain-settle-claims.html Because first the Brits gave back Hong Kong, a cash cow even to today. Second is that the claims (goverment to goverment) were very small, 37 million back then. Lastly it is a settlement, not even close to what I think would be the par value. My thought is that if we were to give up Taiwan, the Chinese may agree somehow to "buy back" or "loan more" to US coffer. But if we don't make payments to China today, that would be a current default. The Chinese may not be able to collect, but we killl the 31 trilllion treasury market. It is just the f*k money, as Jeremy Irons said in the Margin Call, great movie. The best solution is to classify as agency revenue bond, Chinese can segregate whatever railway was built per the offering and any net incomes from those railways will pay back the bondholders, domestic and foreign, in which may nor may not ever be positive net income. Remember all the railways compmaies went bankrupt. Once we kiss each other.
Actually if the U.S. Treasury diverts bond payments due to an individual country to some type of holding or domestic fund -- then it is not considered default on the treasury market. It should be noted that the U.S. Treasury has done this multiple times in the past when a country owed the U.S. money or was hit with a court decision for payments or was labeled as a terrorist state.
Incorrect, we frozen Russia holdings but interests are still accruing. Those sanctioned countries, once they flipped, have the right to claim the money back. Like we took Arfghan 7 billion central bank assets, Taliban can file a suit to get it back at some point, or its successor government.