The Month in U.S.-China Relations 中美关系一个月 (June 2017)

June kicked off with the annual Shangri-La Dialogue (SLD), a security forum in Singapore where the South China Sea, North Korea, and terrorism dominated discussions. U.S. Defense Secretary James Mattis singled out China’s actions in the South China Sea as “undermining the rules-based order.” He criticized “the nature of (China’s) militarization, China’s disregard for international law, its contempt for other nation’s interests, and its efforts to dismiss non-adversarial resolution of issues.” But as Ankit Panda and Prashanth Parameswaran point out in The Diplomat’s Asia Geopolitics podcast, unlike last year’s SLD when the spotlight was on China and the anticipated ruling by the Permanent Court of Arbitration in the Hague, U.S. Asia policy and America’s commitment to the region dominated discussions this year.

Coverage of the SLD was overshadowed by President Trump’s withdrawal from the Paris Climate Agreement, which triggered a renewed flurry of commentary on whether China can become the new global leader. Elizabeth Economy argues that, from an environmental perspective, “the quick answer is no, no, and no.”                               

Although Washington and Beijing were cordial at the first annual U.S.-China Diplomatic and Security Dialogue, questions remained over China’s ability to reign in North Korea. The two sides touted bilateral cooperation, but the Trump Administration’s recent sanctions on a Chinese bank (for alleged links to the North Korean regime) and approval of arms sales to Taiwan is sure to raise tensions as we head into the dog days of summer.

Sandy Pho

Senior Program Associate

Kissinger Institute on China and the United States

Major Issue Tracker

China as an Emerging Superpower

China Builds World’s First Offshore Fish Farm (June 4): According to the People’s Daily, The farm, which is off the coast of Qingdao, incorporates the most advanced and sustainable technology in fish breeding.

The Shanghai Cooperation Organization Summit Highlights Potential for Expanded Cooperation (June 11):  Speaking at the annual summit of the SCO in Kazakhstan, Chinese President Xi called for deepening practical cooperation. Related: Shanghai Cooperation Organization at Crossroads: Views from Moscow, Beijing, and New Delhi; The SCO Welcomes Rivals into its Fold; Full Text of Xi’s Speech.

How the World’s Farmers Went to Work for China (June 12): The combination of more mouths to feed with growing wealth made China a magnet for farm goods, especially from the U.S., which now sells more to China than any other country. Related: Small Iowa Farm Showcases Strong China-U.S. Economic Ties.

Panama Cuts Formal Ties with Taiwan in Favor of China (June 13): According to The Guardian, China is the second-biggest client of the Panama Canal and the leading provider of merchandise to a free-commerce zone in the city of Colon. Taiwan now only has 20 formal diplomatic partners. Related: Taiwanese College Students Denied Entry to UN Human Rights Gallery in Geneva; China ‘Outraged’by Planned $1.42bn U.S. Arms Sales to Taiwan.

China Successfully Launches X-Ray Satellite (June 15): China’s first astronomical satellite, an x-ray telescope that will search the sky for black holes, neutron stars, and other extremely energetic phenomena, raced into orbit from the Gobi Desert. Related: Chinese Scientists Build First Quantum Satellite Network.

U.S. is Still First in Science, but China Rose Fast as Funding Stalled Here and Elsewhere (June 15): Chinese biomedical research teams now rank fourth in the world for total number of new discoveries published in six top-tier journals. Related: Science Journal Retracts 107 Research Papers by Chinese Authors. 

Greece Blocks EU’s Criticism at UN of China’s Human Rights Record (June 18): According to TheGuardian, Greece’s decision was directly attributed to huge Chinese investments in the economically depressed country. Related: EU, China Joint Statement Founders on Trade Status; EU Promises Tough Line on U.S., China on Trade.

China Propels Rise of Electric Ultra-High Performance Cars (June 19): A Chinese-Western startup created an electric car that can get up to 195 miles per hour. The venture is a mix of U.S. and European technology with Chinese money and manufacturing, reflecting China’s rise as a market and investor in the auto industry.

China Trumpets UN Rights Resolution as Combating West’s Monopoly (June 24): The West's monopoly on rights has been dealt a blow by the United Nations' decision to adopt a China-led resolution saying development promotes human rights…Read More>>

China in U.S. Domestic Politics

Ivanka Trump’s Firm Seeks New Trademark in China, Reviving Ethical Concerns (June 5): At about the same time Ivanka joined her father’s administration as White House adviser, at least 14 applications were filed by the Ivanka Trump company, according to CNN. Related: China Approves Nine Trump Trademarks it had Previously Rejected; U.S. Calls on China to Release Activists Investigating Ivanka Trump Brand.

China is Now Looking to California—Not Trump—To Help Lead the Fight Against Climate Change (June 6): California Governor Jerry Brown met with President Xi shortly after Trump pulled America out of the Paris climate accord. Xi emphasized the state’s unique economic impact and encouraged more local cooperation. Related: Top U.S. Diplomat in China Resigns Over Trump Paris Pullout; California, Tsinghua to Set up U.S.-China Climate Change Institute; In Beijing, Perry Promotes U.S.-China Clean Energy Cooperation.

How the White Establishment Waged a ‘War’ on Chinese Restaurants in the U.S. (June 16): "The economic menace [of Chinese restaurants] was twofold. First, if Chinese people had the opportunity to earn a living, then they might stay. And their communities would continue to exist, and the Chinese presence, which many objected to, would continue"…Read More>>

China Invites Ivanka Trump and Jared Kushner to Visit Beijing (June 20): The visit highlights Trump’s reliance on the couple to manage some of the United States’ toughest issues. Neither Kushner nor Ivanka have experience working on Asia issues…Read More>>

The U.S. Rebalance to Asia

Secretary Tillerson in Sydney for Annual Australian-U.S. Ministerial Consultations (June 5-6): The Australian(subscription) reported Secretary Tillerson as saying the U.S. “cannot allow China to use its economic power to buy its way out of other problems.” The remarks came after Prime Minister Turnbull warned Beijing against throwing its weight around in a “coercive” way. An official joint statement is available on the State Department website.

The U.S. Is Losing the Pacific to China (June 7): Ben Bohane writes in The Wall Street Journal (subscription): If the U.S. offers no aid, no investment, no infrastructure and no access to e-commerce platforms at a time when China is offering all of the above, is it any surprise that Pacific island governments and their people are turning to China? Related: James Mattis’s Reassurance Tour is Winning Admirers but Not Believers (subscription)

South Korea Suspends THAAD Deployment (June 8): A South Korean official told CNN that while Seoul will not withdraw the two launchers that are already in action, four additional launchers will not be deployed until "a full-blown environmental impact assessment is completed." Related: U.S. Believes Korea Won't Reverse THAAD Deployment.

U.S.-China Dialogue (June 21): Although the talks generated few major deliverables, Xinhua noted the U.S. and China “pledged to expand mutually-beneficial cooperation and manage differences on the basis of mutual respect…” No joint U.S.-China readout or fact sheets were published. Related: Tillerson and Mattis Joint News Conference on China Discussions (video); Chinese Readout of Dialogue; U.S.-China Talks in Washington Were Another Missed Opportunity on South China Sea; U.S., China Agree to Restrain Business with North Korea.

Trump Sanctions Chinese Bank in Bid to Rein in North Korea (June 29): According to CNN, the U.S. Treasury Department announced last month it was severing American financial ties with China’s Bank of Dandong, which the Administration claims acts as a pipeline to support alleged illicit North Korean financial activity.

North Korea Casts Shadow as Trump and Moon Meet for First Time (June 29): Moon Jae-in, a liberal who took office last month after his conservative predecessor was impeached on corruption charges, is a strong proponent of engagement with Pyongyang. Related: Remarks by the President at a Dinner with South Korean President Moon Jae-in.

Southeast Asia and the South China Sea

Trump Jitters Draw Southeast Asia Into China’s Embrace (June 6): Ben Bland writes for the Financial Times (subscription): Faced with a large Chinese stick, and plenty of tasty carrots, an exhortation to “bear with us” is not enough to give Southeast Asian nations much faith in the direction of U.S. foreign policy.

Thai-U.S. Relations Back on the Move Again? (June 9):  Thitinan Pongsudhirak writes for the Bangkok Post: Thai-U.S. relations appear to be on the move. This apparent thaw in the bilateral alliance comes with potential rewards as well as risks. 

Singapore, China to Work Together on Belt and Road Projects (June 13): While meeting with Singapore’s Foreign Minister Vivian Balakrishnan in Beijing last month, Chinese Foreign Minister Wang Yi proposed the construction of three platforms for cooperation between both countries: Trade networks, financial cooperation, and technology training and transfer. 

This Isn’t the Code of Conduct (COC) You’re Looking For (June 15): Gregory Poling writes for the Asia Maritime Transparency Initiative, “China is not yet willing to hold real negotiations on a COC, but that doesn’t mean that others must sit on their hands indefinitely.” 

China Cuts Short Military Meeting with Vietnam (June 21): According to the New York Times (subscription), a possible reason could have been anger over Vietnam’s recent efforts to promote strategic cooperation with the United States and Japan. The South China Morning Post also reported on this story.

Military

China Responds to U.S. Secretary of Defense James Mattis Remarks at Shangri-La Dialogue (June 4): Secretary Mattis singled out China’s actions in the South China Sea because “…of its militarization [and] it’s disregard for international law…” Chinese Foreign Ministry spokesperson Hua Chunying called Secretary Mattis’ remarks “irresponsible” (text in Chinese). Related: International Rules Should Be Widely Recognized; Why is China Downgrading Participation in the Shangri-La Dialogue? (subscription).

China Shows U.S. its Military Muscle with Patrol Off Hong Kong Amid Rising Maritime Tensions (June 8): Military analysts believe the patrol – in the lead-up to the 20th anniversary of the city’s handover from Britain to China – clearly targeted U.S. military maneuvering in the disputed waters of the South China Sea. Related: China Flexes Military Muscle Hong Kong During Xi Jinping Visit.

China Says it is Vigilant as Two Bombers Fly Over South China Sea (June 9): The U.S. Pacific Command said that two U.S. Air Force B-1B Lancer bombers flew a 10-hour training mission from Guam over the South China Sea in June. Related: U.S. Policy on SCS to Remain “Consistent”; U.S. Navy Adopts Lower-Key Approach to South China Sea (subscription).

China May Soon Establish Naval Base in U.S. Ally Pakistan (June 19): The Chinese-Pakistan alliance also makes sense in terms of their shared rivalry with India. "What better way for China to demonstrate clout than to build a military base right in your rival's backyard?" Related: China Pushes U.S. Aside in Pakistan (subscription).

Technology, Espionage, and Surveillance

China’s Cybersecurity Law Takes Effect: What to Expect (June 1): According to Lawfare, officials are likely to selectively enforce its vast scope, which means that political and economic interests are likely to shape important elements of implementation. Related: Chinese Cyber Diplomacy In A New Era Of Uncertainty; Social Media Platforms Require Real-Name Registration; China Should Suspend Purchases and Use of Windows 10 Pending Security Review (Translated Chinese opinion piece).

Space X Launch Carried a Surprise Payload—A Chinese Science Experiment (June 4): The experiment will study the effects of space radiation on DNA, specifically the rate at which DNA mutates in the space environment. Congress barred NASA from working directly with China in 2011…Read More>>

Spies in the Field: As Farming Goes High-Tech, Espionage Threat Grows (June 8):  The FBI is worried that biotech piracy can spell big trouble for a dynamic and growing U.S industry.

U.S. Drops $258m on Supercomputer Development to Chase Down China (June 16): Secretary of Energy Rick Perry announced in June that Washington would be awarding the money to AMD, Cray, HPE, IBM, Intel, and Nvidia to develop hardware, software, and applications. Related: Chinese Scientists Make Quantum Leap towards a Secure New Kind of Internet.

Virginia Man Arrested and Charged with Espionage (June 22): According to the Department of Justice website, Kevin Patrick Mallory, 60, of Leesburg, Virginia, made his initial appearance in federal court last month on charges that he transmitted Top Secret and Secret documents to an agent of the People’s Republic of China.

Media, Soft Power, and Censorship

China's Broadcast Regulator Tightens Control over Content, Pushes 'Core Socialist Values' (June 3): A notice issued in June states that "Online programs should vigorously promote China's revolutionary culture" advance patriotism, extol the motherland and "praise heroes." Related: China’s Voice Can be Louder, Stronger: Communications Experts

Chinese Citizen Allegedly Given Personal Information on Five Voice of America (VOA) Journalists (June 12): VOA journalists expressed concerns their personal security had been jeopardized as a result of a retaliatory investigation launched against them by VOA’s senior leaders following the case of Chinese whistleblower Guo Wengui’s April interview. Related: Congress Seeks IG Probe of VOA China Interview.

Annecy Festival Drops Chinese Film after Chinese Government Pressure (June 12): Have a Nice Day by Chinese director Liu Jian was dropped from a film festival after requests from Chinese officials. New laws in China make it harder for productions to be screened at overseas festivals without official clearance…Read More>>

Hollywood is Auditing China’s Box-Office for First Time (June 27): Hollywood’s audit is part of a market-access agreement Chinese officials reached with the Motion Picture Association of America almost two years ago, details of which haven’t been disclosed to the public.

Education and Civil Society

Studying in China? Law, Culture, Language Classes are now Compulsory (June 6): International students majoring in philosophy and politics are required to take compulsory political theory courses…Read More>>

Two Vermont Colleges Switch to “University” to Attract Chinese Students (June 12): Johnson State College and Lyndon State College changed “college” to “university” in their names to attract higher-tuition paying foreign students, especially from China…Read More>>

Connecticut Magnet School Strikes Agreement with China (June 16):  The agreement will bring top arts students from China to the Educational Center for the Arts and give the school's students opportunities to connect with a range of schools in China…Read More>>

Dalai Lama Gives UCSD Commencement Speech (June 17): Many of the 3,500 Chinese nationals attending UC San Diego said they felt insulted by his appearance because they believe he supports an independent Tibet, free from China…Read More>>

China’s Universities Accused of Ideological Weakness (June 19): According to the Financial Times (subscription), some of the universities on the list, including Tsinghua and Peking Universities, have academic programs and research partnerships with prominent educational institutions. 

Trade and Economic Relations

Culture Clash at a Chinese-Owned Plant in Ohio (June 10): According to The New York Times (subscription), at Fuyao—a Chinese owned glassmaker in Dayton, Ohio—some workers are questioning the company’s commitment to operating under American supervision and American norms. Columbus Business First also reported on this story.

Trump’s Trade Restrictions Could Miss China and Slam Everybody Else (June 12): David Francis writes in Foreign Policy (subscription) that most imports of Chinese steel are already covered by existing trade remedies dating back to the turn of the century. If the administration were to follow through on all of its proposed trade remedies, it would only slightly increase the share of Chinese goods with some sort of restrictions. Related: Don’t Blame China for the Fall of American Steel; China Concerned by U.S. Probe of Aluminum Imports on National Security Grounds.

Mnuchin Seeks Greater Scrutiny of Chinese Investments in U.S. (June 14): The U.S. Treasury Department wants to include China among a proposed group of hostile nations whose companies would undergo extra scrutiny for national security risks. Related: China Warns Against Political Intervention in Takeovers of U.S. Technology; China-Backed Fund in Third Bid for U.S. to Approve Chip Deal; U.S. Weighs Restricting Chinese Investment in AI; U.S. Rebukes Canada over Chinese Takeover of Norsat.

U.S. Beef Speeds to China by Air as Trade Deal Ends 14-Year Ban (June 14):  Beijing banned U.S. beef imports in 2003 after a U.S. scare over mad cow disease, but last month agreed to allow U.S. shipments by mid-July as part of a broader trade deal…Read More>>

Airbnb Fights House by House with Local Rivals in China (June 14): China’s online short-term rental market brings in 8.8 billion yuan annually, says IResearch Consulting Group, and could reach 17 billion yuan by 2018…Read More>> 

Three-year Long Approval Made by China to Import 2 New GMO Crop Varieties (June 15): The new varieties are Dow AgroSciences' Enlist corn and Monsanto's Vistive Gold soybean. The 14 renewed products include Syngenta's MIR162 Duracade corn, a Monsanto sugar beet and three Bayer rapeseed products…Read More>>

China Deal Set to Boost U.S. Dairy Exports (June 17): According to the South China Morning Post, the agreement will benefit more than 200 U.S. dairy exporters while paving the way for new opportunities in China.

Ford’s Signal to the Auto World: Here Comes China (June 21): Ford Motor’s plans to build its popular Focus compact cars in China, rather than Michigan or Mexico, is a milestone in China’s automotive rise. Related: Ford to Manufacture Ford Focus in China. 

Amazon Takes Second Shot at China with New Import Service (June 22): According to Caixin(subscription), Amazon hopes to draw on its global strength to bolster its cross-border e-commerce business in China.

Jack Ma, “Chief Teaching Officer” of Alibaba, Holds “Class” in Detroit (June 25): To a great extent, Alibaba’s inaugural national conference and exhibition on June 20-21 in Detroit, Michigan – “Gateway ‘17” –  lived up to expectations by offering a rare, star-studded, two-day “deep-dive education” for North American Small and Medium Enterprises…Read More>>

If You Read/Watched Nothing Else in June…

The fine writing and film/videography on U.S.-China relations published each month far exceeds the assimilating capacity of any institution.  It would be ridiculous to feature “the best” efforts of the past 30 days, but KICUS would like to highlight the following work nonetheless:

Podcasts

Policy and Politics: The Impact of China’s New Cybersecurity Law (Ground Truth Briefing, The Wilson Center, June 23)

Ai Weiwei, and Doing Business with China (The New Yorker Radio Hour, June 23)

Blog

Why the U.S. Can’t Take Sides in South China Sea Sovereignty Disputes, Even Against China (Julian Ku, Lawfare, June 19):

Two Cardinal Sins of U.S. South China Sea Policy (Ely Ratner, Asia Unbound, June 20)

Op-Eds and Essays

Course Correction: How to Stop China’s Maritime Advance (Ely Ratner, Foreign Affairs [subscription], July/August 2017)

Why China Is No Climate Leader (Elizabeth Economy, Politico Magazine, June 12)

Are China and The United States Headed for War? (Ian Buruma, The New Yorker, June 19)

As Trump Bets on China’s Help on North Korea, Aides Ask: Is It Worth It? (Mark Landler, The New York Times [subscription], June 15)

The Dark Side of China’s National Renewal (Jamil Anderlini, The Financial Times [subscription], June 21)

Policy Brief

How China is Preparing for an AI-powered Future (Yujia He, The Wilson Center, June 20)

Book

China Story Yearbook 2016: Control (Edited by Jane Golley, Linda Jaivin, and Luigi Tomba. Available for free download from Australian National University).

Report

Military and Security Developments Involving the People’s Republic of China 2017 (Department of Defense Annual Report to Congress)

Interview

Commerce Secretary Wilbur Ross Talks Trade (The Wall Street Journal [subscription], June 18)

Videos

Paris Agreement: As U.S. Steps Aside, Will China Step Up? (Wilson Center, June 2)

Foreign Investments and National Security: A Conversation with Senator Cornyn (Council on Foreign Relations, June 22)