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Tag: China

  • Biden administration demands TikTok’s Chinese owners spin off their share or face US ban | CNN Business

    Biden administration demands TikTok’s Chinese owners spin off their share or face US ban | CNN Business



    CNN
     — 

    The Biden administration has threatened to ban TikTok from the United States unless the app’s Chinese owners agree to spin off their share of the social media platform, TikTok acknowledged Wednesday evening.

    The apparent ultimatum by a US multiagency panel known as the Committee on Foreign Investment in the United States (CFIUS) marks a possible turning point in the long-running negotiations between federal officials concerned about TikTok’s links to China and a wildly popular social media company with more than 100 million US users.

    The recent divestiture request was first reported Wednesday by the Wall Street Journal; TikTok later confirmed to CNN that CFIUS had contacted the company, adding that it did not dispute the Journal’s report. But TikTok declined to discuss specifics of the US government’s request, including details around its timing.

    “If protecting national security is the objective, divestment doesn’t solve the problem,” TikTok spokesperson Maureen Shanahan said in a statement. “A change in ownership would not impose any new restrictions on data flows or access. The best way to address concerns about national security is with the transparent, US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing.”

    TikTok has been negotiating with CFIUS — a group composed of the Departments of Treasury, Justice, Homeland Security, Defense and Commerce, among others — for more than two years on a deal that might allow the app to continue operating in the US market in the face of security and privacy concerns. US officials have raised fears that the Chinese government could use its national security laws to pressure TikTok or its Chinese parent ByteDance into handing over the personal information of TikTok’s US users, which might then benefit Chinese intelligence activities or influence campaigns.

    The Treasury Department, which chairs CFIUS, declined to comment.

    The talks with TikTok have stretched on without resolution, prompting criticism of the Biden administration by some US lawmakers who have pushed to ban the app through legislation.

    Late last year, Congress passed, and President Joe Biden signed, legislation blocking TikTok from US government devices, following in the footsteps of numerous state governments. Since then, the European Union and Canada have also followed suit, reflecting growing suspicion among western governments to TikTok. But so far, there has been no evidence that the Chinese government has actually accessed TikTok user data, and no government has enacted a broader ban targeting TikTok on personal devices.

    TikTok has sought to address policymakers’ concerns with voluntary technical and bureaucratic safeguards that it says will help ensure US user data may only be accessed by US employees. Part of that initiative, which the company calls Project Texas, involves storing personal data with the US cloud giant Oracle. TikTok launched a similar push in Europe this month that it calls Project Clover.

    That has not stopped TikTok’s US critics. Some US lawmakers have moved to expand Biden’s authority to impose a nationwide TikTok ban on top of the restrictions targeting US government devices, and independent of the CFIUS process — a proposal the White House quickly welcomed. The heat will likely intensify next week as TikTok CEO Shou Chew is expected to face a grilling before the House Energy and Commerce Committee.

    Wednesday’s development suggests a shift has occurred in the typically opaque CFIUS talks, though the exact nature of the movement remains unclear, according to Harry Broadman, a former CFIUS official.

    “It could be that the divestiture demand is the end of the discussion, but it’s also equally likely that the divestiture is a component of what CFIUS wants in terms of safeguarding national security,” Broadman said. “Unless I’m in the room at CFIUS, it’s really hard to know where the discussions are, and frankly, what’s discussed in public does not often coincide with what’s going on around the table.”

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  • South Korean leader lands in Japan for first visit in 12 years for fence-mending summit | CNN

    South Korean leader lands in Japan for first visit in 12 years for fence-mending summit | CNN



    CNN
     — 

    South Korean President Yoon Suk Yeol arrived in Japan Thursday for a fence-mending summit, the first such visit in 12 years as the two neighbors seek to confront growing threats from North Korea to rising concerns about China.

    Those shared security challenges were on stark display just hours before the trip when North Korea fired a long-range ballistic missile into the waters off the east coast of the Korean Peninsula – the fourth intercontinental ballistic missile launch in less than one year.

    Japan’s Chief Cabinet Secretary Hirokazu Matsuno condemned the latest launch, calling it a “reckless act” that “threatens the peace and security of our country, the region, and the international community.”

    The summit between Yoon and Japanese Prime Minister Fumio Kishida is a crucial step to mend frayed ties after decades of disputes and mistrust between two crucial US allies in Asia.

    Yoon’s office has hailed it “an important milestone” in the development of bilateral relations.

    The two East Asian neighbors have a long history of acrimony, dating back to Japan’s colonial occupation of the Korean Peninsula a century ago.

    The two normalized relations in 1965, but unresolved historical disputes have continued to fester, in particular over colonial Japan’s use of forced labor and so-called “comfort women” sex slaves.

    In recent years the often fraught relations have undermined efforts by the United States to present a united front against North Korea – and the growing assertiveness of Beijing.

    Now, the region’s two most important allies for the US appear ready to turn a new page in bilateral ties.

    Much of that is driven by deepening security concerns about Pyongyang’s ever more frequent missile tests, China’s increasingly aggressive military posturing and tensions across the Taiwan Strait – an area both Tokyo and Seoul say is vital to their respective security.

    Before departing for Tokyo, Yoon told international media on Wednesday “there is an increasing need for Korea and Japan to cooperate in this time of a polycrisis,” citing escalating North Korean nuclear and missile threats and the disruption of global supply chains.

    “We cannot afford to waste time while leaving strained Korea-Japan relations unattended,” Yoon said.

    Analysts say this outreach is a break from the past.

    Under Yoon’s predecessor Moon Jae-in, South Korea’s relationship with Japan was “openly combative,” said Joel Atkinson, a professor specializing in Northeast Asian international politics at Hankuk University of Foreign Studies in Seoul.

    “So this visit is significant, sending a strong signal that under the Yoon administration, both sides are now working much more cooperatively,” Atkinson said.

    The thaw in relations comes after South Korea took a major step toward resolving a long-running dispute that plunged ties to their lowest point in decades.

    Last week, South Korea announced it would compensate victims of forced labor under Japan’s occupation from 1910 to 1945 through a public foundation funded by private Korean companies – instead of asking Japanese firms to contribute to the reparations.

    The move was welcomed by Japan and hailed by US President Joe Biden as “a groundbreaking new chapter of cooperation and partnership between two of the United States’ closest allies.”

    The deal broke a deadlock reached in 2018, when South Korea’s Supreme Court ordered two Japanese companies to compensate 15 plaintiffs who sued them over forced labor during Japan’s colonial rule.

    Japan did not agree with the South Korean court’s 2018 decision, and no compensation had been paid by Tokyo.

    That led to rising tensions between the two sides, with Japan restricting exports of materials used in memory chips, and South Korea scrapping its military intelligence-sharing agreement with Tokyo during the presidency of Moon.

    But the Yoon administration has been striving to improve relations between Seoul and Tokyo – even if it means pushing back against domestic public pressure on contentious, highly emotional issues like the compensation plan.

    Apart from the growing North Korean nuclear threat, China appears to have been a big factor in Yoon’s willingness to face the domestic backlash over the compensation deal, said Atkinson, the expert in Seoul.

    “The administration is making the case to the South Korean public that this is not just about Japan, it is about engaging with a wider coalition of liberal democracies,” he said.

    “What South Koreans perceive as Beijing’s bullying, arrogant treatment of their country, as well as its crushing of the Hong Kong protests, threats toward Taiwan and so on, have definitely prepared the ground for that.”

    Even before the pivotal move to settle the historical dispute, Seoul and Tokyo have signaled their willingness to put the past behind them and foster closer relations.

    On March 1, in a speech commemorating the 104th anniversary of South Korea’s protest movement against Japan’s colonial occupation, Yoon said Japan had “transformed from a militaristic aggressor of the past into a partner” that “shares the same universal values.”

    Since taking office, the two leaders have embarked on a flurry of diplomatic activities toward mending bilateral ties – and deepening their joint cooperation with Washington.

    In September, Yoon and Kishida held the first summit between the two countries since 2019 in New York on the sidelines of the United Nations General Assembly, where they agreed to improve relations.

    In November, the two leaders met Biden in Cambodia at a regional summit, where they “commended the unprecedented level of trilateral coordination” and “resolved to forge still-closer trilateral links, in the security realm and beyond.”

    Closer alignment among the US, Japan and South Korea is an alarming development to China, which has accused Washington of leading a campaign to contain and suppress its development.

    Beijing is particularly worried about the involvement of South Korea in the Quadrilateral Security Dialogue – better known as “the Quad” – an informal security dialogue among the US, Japan, Australia and India. It views the grouping as part of Washington’s attempt to encircle the country with strategic and military allies.

    Last week, a senior South Korean official said Seoul plans to “proactively accelerate” its participation in the Quad working group.

    “Although we have not yet joined the Quad, the Yoon Suk Yeol government has been emphasizing its importance in terms of its Indo-Pacific strategy,” the official told reporters during a visit to Washington, D.C., Yonhap reported.

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  • Dutch to restrict semiconductor tech exports to China, joining US effort | CNN Business

    Dutch to restrict semiconductor tech exports to China, joining US effort | CNN Business


    Amsterdam/Washington
    Reuters
     — 

    The Netherlands’ government on Wednesday said it plans new restrictions on exports of semiconductor technology to protect national security, joining the US effort to curb chip exports to China.

    The announcement marked the first concrete move by the Dutch, who oversee essential chipmaking technology, toward adopting rules urged by Washington to hobble China’s chipmaking industry and slow its military advances.

    The US in October imposed sweeping export restrictions on shipments of American chipmaking tools to China, but for the restrictions to be effective it needs other key suppliers in the Netherlands and Japan, who produce key chipmaking technology, to agree. The allied countries have been in talks on the matter for months.

    Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions will be introduced before the summer.

    Her letter did not name China, a key Dutch trading partner, nor did it name ASML Holding

    (ASML)    , Europe’s largest tech firm and a major supplier to semiconductor manufacturers, but both will be affected. It specified one technology that will be impacted is “DUV” lithography systems, the second-most advanced machines that ASML sells to computer chip manufacturers.

    “Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,” the letter said.

    A White House representative did not immediately respond to a request for comment.

    ASML said in a response it expects to have to apply for licenses to export the most advanced segment among its DUV machines, but that would not impact its 2023 financial guidance.

    ASML dominates the market for lithography systems, multimillion dollar machines that use powerful lasers to create the minute circuitry of computer chips.

    The company expects sales in China to remain about flat at 2.2 billion euros in 2023, implying relative shrinkage as the company expects overall sales to grow by 25%. Major ASML customers such as TSMC and Intel

    (INTC)     are engaged in capacity expansions.

    ASML has never sold its most advanced “EUV” machines to customers in China, and the bulk of its “DUV” sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers, Samsung

    (SSNLF)     and SK Hynix both have significant manufacturing capacity in China.

    The Dutch announcement leaves major questions unanswered, including whether ASML will be able to service the more than 8 billion euros worth of DUV machines it has sold to customers in China since 2014.

    Schreinemacher said the Dutch government had decided on measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains.”

    “It is for companies of importance to know what they are facing and to have time to adjust to new rules,” she wrote.

    Japan is expected to issue an update on its chip equipment export policies as soon as this week.

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  • China’s Xi to visit Putin in Russia next week

    China’s Xi to visit Putin in Russia next week

    Chinese President Xi Jinping will pay a three-day visit to his Russian counterpart Vladimir Putin next week, Beijing and Moscow announced Friday, with “strategic cooperation” on the agenda.

    “On March 20-22, 2023, at the invitation of Vladimir Putin, president of the People’s Republic of China Xi Jinping will pay a state visit to Russia,” the Kremlin’s press service said in a statement.

    “A number of important bilateral documents will be signed,” the statement reads.

    Neither country confirmed previous reports from the Wall Street Journal that Xi would use the opportunity to call Ukrainian President Volodymyr Zelenskyy — in what would be the first communication between the two leaders since Russia launched its full-scale invasion of Ukraine last February.

    While China was initially committed to a “no-limit partnership” passed with Moscow days before the beginning of the war in Ukraine, Beijing has since sought to position itself as a peace broker, introducing a 12-point plan for peace.

    Yet, Beijing’s attempts have drawn criticism from Western leaders. China, they said, is anything but neutral in the war, and thus not a good fit to be playing the arbiter.

    China has been accused by the U.S. of delivering non-lethal “support” to Russia — and, according to exclusive customs data obtained by POLITICO, Chinese companies shipped more than 1,000 assault rifles, drone parts and body armor to Russian entities between June and December of last year.

    Nicolas Camut

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  • Germany, Japan pledge to boost cooperation on economic security

    Germany, Japan pledge to boost cooperation on economic security

    Germany and Japan agreed on Saturday to strengthen cooperation on economic security in the aftermath of tensions over global supply chains and the economic impact of the war in Ukraine.

    In the first high-ministerial government consultations held between the two countries, German Chancellor Olaf Scholz reached out to Tokyo to seek to reduce Germany’s dependence on China for imports of raw materials.

    “The current challenges of our time make it clear: It is important to expand cooperation with close partners and acquire new partners. We want to reduce dependencies and increase the resilience of our economies.” the German chancellor said in a tweet.

    Scholz and Japanese Prime Minister Fumio Kishida said they believe the agreement will allow both countries to diversify value chains in order to be able to reduce economic risks.

    In a joint statement, the two countries said they will work on establishing “a legal framework for bilateral defense and security cooperation activities,” including ways to protect critical infrastructures, trade routes and to secure future supply of sustainable energy.

    Germany’s decision to prioritize consultations with Japan came after the Asian country put forward an economic security bill last year aimed at securing the uptake of technology and bolstering critical supply chains. 

    Japan is Germany’s second-largest trading partner in Asia after China, with a bilateral trade volume of €45.7 billion mainly based on the import and export of machinery, vehicles, electronics and chemical products.

    The two leaders also exchanged views on the situation in Ukraine, cooperation in the Indo-Pacific region and the G7 meeting in Hiroshima scheduled for May.

    POLITICO Staff

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  • China’s economic recovery is on track. But youth unemployment is getting worse | CNN Business

    China’s economic recovery is on track. But youth unemployment is getting worse | CNN Business


    Hong Kong
    CNN
     — 

    China’s economic recovery appears to be on track as it gradually emerges from three years of its strict zero-Covid policy. But rising youth unemployment underscores the tough challenges ahead for the new government to achieve its economic targets and maintain social stability.

    The National Bureau of Statistics on Wednesday released key economic indicators for January and February combined, a usual practice to avoid any distortion by the long Lunar New Year holiday, which usually falls on different dates every year.

    Industrial production rose by 2.4%, accelerating from December’s 1.3% growth. Retail sales increased 3.5%, reversing a 1.8% decline in the previous month. The growth figures are in line with market expectations.

    Investment in fixed assets, such as real estate and infrastructure, jumped 5.5%, beating estimates. In particular, capital spending on electricity and heating facilities and railways soared around 20%.

    “The economic data released today confirmed the recovery in China was well on track,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

    Recent PMI figures had indicated a strong recovery in China’s economic activity, with February’s factory output from large, state-owned enterprises hitting the highest level in more than a decade.

    “The fading of virus disruptions led to a rapid improvement in economic conditions at the start of the year,” analysts from Capital Economics wrote.

    But there are some weak spots in Wednesday’s data.

    Youth unemployment surged. The jobless rate for 16- to 24-year-olds hit 18.1% in the January-to-February period, compared to 16.7% in December. The overall unemployment rate also increased to 5.6%.

    The real estate sector remains mired in a deep slump.

    Property investment fell 5.7% from a year ago in the first two months of this year, although it was an improvement from the 12.2% drop seen in December. Property sales by floor area contracted 3.6%.

    At the just-concluded session of the National People’s Congress, the country’s rubber-stamp parliament, the government set a cautious growth plan for this year, with a GDP target of around 5% and a job creation target of 12 million.

    But Li Qiang, the new premier who took office on Saturday, admitted it’s “not an easy task” to achieve the stated goals.

    At his first news conference on Monday, Li highlighted the challenge to create enough jobs.

    “This year’s college graduates are expected to reach 11.58 million people. From the perspective of employment, there will be certain pressure,” he said. “We will further expand employment channels and help young people.”

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  • China has shattered the assumption of US dominance in the Middle East | CNN

    China has shattered the assumption of US dominance in the Middle East | CNN



    CNN
     — 

    With a grandiose diplomatic flourish China brokered a rapprochement between Saudi Arabia and Iran, in the process upending US calculus in the Gulf and beyond.

    While the United States has angered its Gulf allies by apparently dithering over morality, curbing arms supplies and chilling relations, Saudi Arabia’s King-in-waiting Crown Prince Mohammed bin Salman, known as MBS, has found a kindred spirit in China’s leader Xi Jinping.

    Both are bold, assertive, willing to take risks and seemingly share unsated ambition.

    Friday’s announcement that Riyadh and Tehran had renewed diplomatic ties was unexpected, but it shouldn’t have been. It is the logical accumulation of America’s diplomatic limitations and China’s growing quest to shape the world in its orbit.

    Beijing’s claim that “China pursues no selfish interest whatsoever in the Middle East,” rings hollow. It buys more oil from Saudi Arabia than any other country in the world.

    Xi needs energy to grow China’s economy, ensure stability at home and fuel its rise as a global power.

    His other main supplier, Russia, is at war, its supplies therefore in question. By de-escalating tensions between Saudi and Iran, Xi is not only shoring up his energy alternatives but, in a climate of growing tension with the US, also heading off potential curbs on his access to Gulf oil.

    Xi’s motivation appears fueled by wider interests, but even so the US State Department welcomed the surprise move, spokesman Ned Price saying, “we support anything that would serve to deescalate tensions in the region, and potentially help to prevent conflict.”

    Iran has buy-in because China has economic leverage. In 2021 the pair signed a trade deal reportedly worth up to $400 billion of Chinese investment over 25 years, in exchange for a steady supply of Iranian oil.

    Tehran is isolated by international sanctions and Beijing is providing a glimmer of financial relief.

    And, in the words of Iran’s Supreme leader Ayatollah Ali Khamenei last year, there’s also the hope of more to come as he sees geopolitical power shifting east.

    “Asia will become the center of knowledge, the center of economics, as well as the center of political power, and the center of military power,” Khamenei said.

    Saudi has buy-in because war with Iran would wreck its economy and ruin MBS’s play for regional dominance. His bold visions for the country’s post fossil-fuel future and domestic stability depend on inwardly investing robust oil and gas revenues.

    US State Department spokesman Ned Price pictured in July 2022.

    It may sound simple, but the fact the US couldn’t pull it off speaks to the complexities and nuance of everything that’s been brewing over the past two decades.

    America’s wars in Iraq and Afghanistan have burned through a good part of its diplomatic capital in the Middle East.

    Many in the Gulf see the development of the war in Ukraine as an unnecessary and dangerous American adventure, and some of Russian President Vladimir Putin’s territorial claims over Ukraine not without merit.

    Chinese and Saudi flags in Riyadh in December 2022.

    What the global West sees as a fight for democratic values lacks resonance among the Gulf autocracies, and the conflict doesn’t consume them in the same way as it does leaders in European capitals.

    Saudi Arabia, and MBS in particular, have become particularly frustrated with America’s flip-flop diplomacy: dialling back relations over the Crown Prince’s role in the murder of Washington Post columnist Jamal Khashoggi (which MBS denies); then calling on him to cut oil production swiftly followed by requests to increase it.

    These inconsistencies have led the Saudis to hew policy to their national interests and less to America’s needs.

    During his visit to Saudi last July, US President Joe Biden said: “We will not walk away and leave a vacuum to be filled by China, Russia, or Iran.” It seems now that the others are walking away from him.

    On Beijing’s part, China’s Gulf intervention signals its own needs, and the opportunity to act arrived in a single serving.

    Xi helped himself because he can. The Chinese leader is a risk taker.

    His abrupt ending of austere Covid-19 pandemic restrictions at home is just one example, but this is a more complex roll of the dice.

    Mediation in the Middle East can be a poisoned chalice, but as big as the potential gains are for China, the wider implications for the regional, and even global order, are quantifiably bigger and will resonate for years.

    US President Joe Biden (center-left) and Saudi Crown Prince Mohammed bin Salman (center) in Jeddah in July 2022.

    Yet harbingers of this shake-up and the scale of its impact have been in plain sight for months. Xi’s high-profile, red-carpet reception in Riyadh last December for his first overseas visit after abandoning his domestic “zero-Covid” policy stirred the waters.

    During that trip Saudi and Chinese officials signed scores of deals worth tens of billions of dollars.

    China’s Foreign Ministry trumpeted Xi’s visit, paying particular attention to one particular infrastructure project: “China will deepen industrial and infrastructure cooperation with Saudi Arabia (and) advance the development of the China-Saudi Arabia (Jizan) Industrial Park.”

    The Jizan project, part of China’s belt and road initiative, heralds huge investment around the ancient Red Sea port, currently Saudi’s third largest.

    Jizan lies close to the border with Yemen, the scene of a bloody civil war and proxy battle between Riyadh and Tehran since 2014, sparking what the United Nations has described as the world’s worst humanitarian crisis.

    Significantly since Xi’s visit, episodic attacks by the Iran-backed Houthi rebels on Jizan have abated.

    There are other effects too: the plans to upscale Jizan’s container handling puts Saudi in greater competition with the UAE’s container ports and potentially strains another regional rivalry, as MBS drives to become the dominant regional power, usurping UAE’s role as regional hub for global businesses.

    Xi will have an interest seeing both Saudi Arabia and the UAE prosper, but Saudi is by far the bigger partner with higher potential global economic heft and, importantly, massive religious clout in the Islamic world.

    Where the UAE and Saudi align strongly is eschewing direct conflict with Tehran.

    A deadly drone attack in Abu Dhabi late last year was claimed by the Houthis, before the rebels quickly rescinded it. But no one publicly blamed the Houthis’ sponsors in Tehran.

    A once shaky ceasefire in Yemen now also seems to be moving toward peace talks, perhaps yet another indication of the potential of China’s influence in the region.

    Beijing is acutely aware of what a continued war over the Persian Gulf could cost its commercial interests – another reason why a Saudi/Iran rapprochement makes sense to Xi.

    Iran blames Saudi for stoking the massive street protests through its towns and cities since September.

    Saudi denies that accusation, but when Iran moved drones and long-range missiles close to its Gulf coast and Saudi, Riyadh called on its friends to ask Tehran to de-escalate. Russia and China did, the threat dissipated.

    Tehran, despite US diplomatic efforts, is also closing in on nuclear weapons capability and Saudi’s MBS is on record saying he’ll ensure parity, “if Iran developed a nuclear bomb, we will follow suit as soon as possible.”

    Late last week US officials said Saudi was seeking US security guarantees and help developing a civilian nuclear program as part of a deal to normalize relations with Israel, an avowed enemy of Iran’s Ayatollahs.

    Indeed, when US Secretary of State Antony Blinken visited Israel late January, concerned over a rising Palestinian death toll in a violent year in the region, potential settlement expansions and controversial changes to Israel’s judiciary Prime Minister Benjamin Netanyahu spoke to Blinken about “expanding the circle of peace,” and improving relations with Arab neighbours, including Saudi Arabia.

    US Secretary of State Antony Blinken (left) with Israeli Prime Minister Benjamin Netanyahu in May 2021.

    But as Saudi seems to shift closer to Tehran, Netanyahu’s mission just got harder. While both Saudi and Israel strongly oppose a nuclear-armed Iran, only Netanyahu seems ready to confront Tehran.

    “My policy is to do everything within Israel’s power to prevent Iran from acquiring nuclear weapons,” the Israeli leader told Blinken.

    Riyadh favors diplomacy. As recently as last week the Saudi foreign minister said: “It’s absolutely critical … that we find and an alternative pathway to ensuring an (Iranian) civilian nuclear program.”

    By improving ties with Tehran, he said, “we can make it quite clear to the Iranians that this is not just a concerns of distant countries but it’s also a concern of its neighbors.”

    For years this is what America did, such as brokering the Iran nuclear deal, or JCPOA, in 2015.

    Xi backed that deal, the Saudis didn’t want it, Iran never trusted it, Biden’s predecessor Donald Trump’s withdrawal confirmed Iran’s fears and sealed its fate, despite the ongoing proximity talks to get American diplomats seated at the table again.

    Iran has raced ahead in the meantime, massively over-running the bounds of the JCPOA limits on uranium enrichment and producing almost weapons-grade material.

    What’s worse for Washington is that Trump’s JCPOA withdrawal legacy tainted international perceptions of US commitment, continuity and diplomacy. All these circumstances perhaps signaled to Xi that his time to seize the lead on global diplomacy was coming.

    Yet the Chinese leader seems to accept what Netanyahu won’t and what US diplomacy is unable to prevent: that sooner, rather than later, Iran will have a nuclear weapon. As such, Xi may be fostering Saudi-Iran rapprochement as a hedge against that day.

    So Netanyahu looks increasingly isolated and the Israeli leader, already under huge domestic pressure from spiking tensions with Palestinians and huge Israeli protests over his proposed judicial reforms, now faces a massive re-think on regional security.

    The working assumption of American diplomatic regional primacy is broken, and Netanyahu’s biggest ally is now not as hegemonic as he needs. But by how much is still far from clear.

    It’s not a knockout, but a gut blow, to Washington. How Xi calculates the situation isn’t clear either. The US is not finished, far from it, but it is diminished, and both powers are coexisting in a different way now.

    Earlier this month, the Chinese leader made unusually direct comments accusing the US of leading a campaign against China and causing serious domestic woes.

    “Western countries led by the United States have contained and suppressed us in an all-round way, which has brought unprecedented severe challenges to our development,” Xi told a group of government advisers representing private businesses on the sidelines of an annual legislative meeting in Beijing.

    Meanwhile, Biden has defined the future US-China relationship as “competition not confrontation,” and he has built his foreign policy around the tenets of standing up for democracy.

    It is striking that neither Xi, nor Khamenei, nor MBS are troubled by the moral dilemmas that circumscribe Biden. This is the big challenge the US president warned about, and now it’s here. An alternative world order, irrespective of what happens in Ukraine.

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  • Not just casinos: Macao reimagines tourism post-pandemic | CNN

    Not just casinos: Macao reimagines tourism post-pandemic | CNN

    Editor’s Note: Sign up for Unlocking the World, CNN Travel’s weekly newsletter. Get the latest news in aviation, food and drink, where to stay and other travel developments.


    Macao, China
    CNN
     — 

    Like many of his peers, Dan McAulay was furloughed from his job as a pilot during the pandemic.

    Being based in Macao, a city that had one of the world’s strictest approaches to the coronavirus pandemic, he found himself with a lot of time on his hands.

    McAulay and his wife, Rebeca Fellini, started learning how to distill alcohol as a lockdown hobby. And by the end of the nearly three years that Macao was a relative fortress, they had grown their pastime into a bona fide business – a gin brand called Owl Man, a play on the Chinese pronunciation of the city’s name “Ah Mahn.”

    Now, McAulay is back in the skies with Air Macau and Fellini manages the distillery’s day-to-day business.

    Even though their business was born during lockdown, they – like so many other businesses around the city – are pinning their hopes on the return of tourism.

    Macao, an hour’s ferry ride from Hong Kong, is the only place in China where gambling is legal.

    Often called the “Vegas of Asia,” in pre-pandemic times it wasn’t unusual to see a high-spending “whale” helicopter in and out of the city for a single afternoon at the craps table.

    As a result, the city’s primary economy is the casinos and the businesses supporting them, from hotels to spas to high-end shops.

    Macao only has about 600,000 residents – compared to seven million in Hong Kong – but brings in six times as much revenue as Las Vegas in a typical year.

    Before the pandemic, 80% of Macao’s government revenue came from the gaming industry. Big players like Wynn, Venetian and MGM all have a significant presence in the city.

    Covid threw that all into a tailspin. Nearly three years of intermittent lockdowns and blocked travel from the mainland and Hong Kong had a devastating effect on the city’s primary source of income.

    But it also provided time for innovation.

    “The government realized they can’t focus all their efforts on gaming and (tourists from) the mainland. Gastronomy is one of their big pushes,” explains McAulay.

    “Being the only distillery in Macao, it’s working out amazing for us. The hotels and casinos are encouraged to support local food and beverage companies. It has given us quite a strong start.”

    He isn’t the only entrepreneur who used the tourism slowdown to rethink his business model.

    Asai, who uses only his first name professionally, owns several Portuguese restaurants and cafes around the territory. As a former Portuguese colony, Macao is known for food traditions like egg tarts, African chicken and bacalao (codfish fritters).

    But Asai wants visitors to know there’s still an active, thriving Portuguese community in Macao – and they’re offering more than the usual favorites.

    Egg custard tarts, or pasteis de natas in Portuguese, are one of the most popular souvenirs from Macao, with long lines at establishments like Lord Stow’s and Margaret’s.

    Pasteis de Chaves is a small, trendy-looking cafe that wouldn’t be out of place in Brooklyn. Though it does sell egg tarts, its name comes from the signature offering – beef stuffed pastries that offer a savory complement to the sweet eggy ones.

    Across the road, Three Sardines is a romantic, dimly lit spot specializing in petiscos, a Portuguese equivalent of tapas with small plates like fried octopus and grilled peppers.

    “Competition is high for Portuguese restaurants, but many are localized twisted versions of Portuguese food,” says Asai, who has been in Macao for 18 years and stayed through the pandemic. “We try to offer more traditional and unique experiences. This is a niche and helped us survive the pandemic.”

    Chef Pedro Almeida behind the bar at Three Sardines.

    Now, he is one of many local business owners looking outward for the first time in several years as tourists slowly trickle back to Macao.

    Like Owl Man, Asai’s restaurant group has received government support as Macao diversifies its food and drink scene.

    For instance, he and head chef Pedro Almeida worked with the Macau Government Tourist Office (MGTO) on a video to explain the origin of egg tarts and how they’re different in Macao and Portugal.

    As the first international tourists began returning to Macao in February 2023, it was clear that a lot had changed.

    Many small neighborhood restaurants closed during lockdown, and those that have reopened have had trouble staffing up after so many workers left the city permanently.

    But new attractions have opened as well, with casinos trying to diversify their offerings and become more family-friendly.

    The city’s first-ever outdoor zip line, ZipCity, opened at Taipa’s Lisboeta casino complex in January 2023. The timing worked out well, as mainland Chinese tourists flooded the city during Lunar New Year – a representative for the company says that ZipCity operated “at 90% capacity” during that holiday week.

    The ZipCity zipline is 338 meters (about 1,100 feet) long.

    Despite the pandemic, ongoing construction projects were still completed – if not necessarily on schedule.

    Popular Japanese immersive art experience TeamLab opened an outpost at the Venetian in June 2020, and a new British-themed resort, The Londoner, opened in 2021 complete with penthouse suites designed by David Beckham.

    Arguably the city’s most well-known landmark, the ruins of St. Paul’s Church, has been reinvigorated by a new on-site VR experience that enables visitors to see what the church looked like during different historical periods.

    The city is rolling out incentives to bring back those tourists, as well.

    People coming over via ferry from Hong Kong qualify for a buy-one-get-one free boat ticket if they’re staying at least one night in a hotel – an incentive to stay longer and not just make it a day trip.

    Most businesses and vendors in Macao, including taxi drivers, will accept Hong Kong dollars – while very few of their counterparts in Hong Kong will accept the Macanese pataca.

    Macao’s tourism authority also announced programs aimed at international travelers, including deals on package trips.

    On the ground, things look lively.

    Weekend ferries from Hong Kong have been selling out, and popular areas like Senado Square and the Guia Fortress – which is part of the city’s UNESCO-listed historical center – are thronged with visitors.

    That includes casinos as well. On a recent mid-week visit, tables at the MGM and Venetian casinos were full of both gamblers and gawkers.

    Macao dropped its mask mandate on February 26, with Hong Kong following suit a week later. However, many casino-goers still sported masks indoors once it became voluntary, perhaps due to the close quarters at blackjack tables.

    For now, though, tourism is mostly regional.

    According to data from Macao’s tourism authority, the majority of visitors arriving in January 2023 were from mainland China, Hong Kong, Taiwan, the Philippines and Indonesia.

    In January 2019, 3.4 million tourists came to Macao, with most from mainland China. In January 2023, 1.4 million visited, most during the Lunar New Year holiday.

    Hometown airline Air Macau has been steadily ratcheting up capacity to add more flights from Singapore and Taipei, two of Macao’s biggest markets. More mainland China routes will return by March 26.

    Low-cost Asian carriers like Cambodia Airways and Thai Vietjet also brought back their pre-pandemic air links.

    “I think everyone expected (tourism) to bounce back, but talking to all our friends in the hotels and casinos, they’re saying their fourth quarter predictions have bounced back faster than they anticipated,” says McAulay, the Owl Man co-founder.

    “I think it’s re-energizing.”

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  • Australia, the UK and US are joining forces in the Pacific, but will nuclear subs arrive quick enough to counter China? | CNN

    Australia, the UK and US are joining forces in the Pacific, but will nuclear subs arrive quick enough to counter China? | CNN


    Canberra, Australia
    CNN
     — 

    More than a year after the United States, the United Kingdom and Australia dropped the tightly held news they were combining submarine forces, the trio released more details Monday of their ambitious plan to counter China’s rapid military expansion.

    Under the multi-decade AUKUS deal, the partners will build a combined fleet of elite nuclear-powered submarines using technology, labor and funding from all three countries, creating a more formidable force in the Indo-Pacific than any of them could achieve alone.

    But the long timeline and huge financial costs – running into the hundreds of billions for Australia alone – poses questions about how far the partners’ plans could stray from their “optimal pathway” in the decades to come as governments, and potentially priorities, change.

    In a joint statement Monday, US President Joe Biden, Australian Prime Minister Anthony Albanese and UK counterpart Rishi Sunak said the “historic” deal will build on past efforts by all three countries to “sustain peace, stability, and prosperity around the world.”

    The plan begins this year with training rotations for Australian personnel on US and UK subs and bases in the expectation that in roughly 20 years, they’ll commandeer Australia’s first ever nuclear-powered fleet.

    But there’s a long way to go between now and then, as outlined in a series of phases announced by the leaders as they stood side-by-side in San Diego Harbor.

    From 2023, along with training Australians, US nuclear-powered subs will increase port visits to Australia, joined three years later by more visits from British-owned nuclear-powered subs.

    Come 2027, the US and UK subs will start rotations at HMAS Stirling, an Australian military port near Perth, Western Australia that’s set to receive a multibillion dollar upgrade.

    Then from the early 2030s, pending Congress approval, Australia will buy three Virginia-class submarines from the US, with an option to buy two more.

    Within the same decade, the UK plans to build its first AUKUS nuclear-powered submarine – combining its Astute-class submarine with US combat systems and weapons.

    Soon after, in the early 2040s, Australia will deliver the first of its homemade AUKUS subs to its Royal Navy.

    As a series of bullet points on the page, the plan seems straightforward.

    But the complexities involved are staggering and require an unprecedented level of investment and information sharing between the three partners, whose leaders’ political careers are set to be far shorter than those of the man they are working to counter: China’s Xi Jinping.

    Last week China’s political elite endorsed Xi’s unprecedented third term, solidifying his control and making him the longest-serving head of state of Communist China since its founding in 1949.

    The most assertive Chinese leader in a generation, Xi has expanded his country’s military forces and sought to extend Beijing’s influence far across the Indo-Pacific, rattling Western powers.

    Richard Dunley, from the University of New South Wales, said Australia was under pressure to respond after years of inaction and the proposal is an impressive scramble for a workable plan.

    “It’s a last roll of the dice. And they’ve managed to just about thread the eye of a needle coming up with something that looks plausible.”

    A rush of diplomacy took place before Monday’s announcement, partly to avoid the shock impact of the initial announcement in 2021, when French President Emmanuel Macron accused former Australian Prime Minister Scott Morrison of lying to him when he pulled out of a 90 billion Australian dollar deal to buy French subs.

    That deal would have delivered new submarines on a faster timeline, but they would have been conventional diesel-powered vessels instead of state of the art nuclear ones.

    Australia learned from that diplomatic row and its senior leaders – including Albanese – made around 60 calls to allies and regional neighbors to inform them of the plan before it was announced, according to Australian Defense Minister Richard Marles.

    China wasn’t one of them.

    Biden told reporters Monday that he plans to speak with Xi soon but declined to say when that would be, adding that he was not concerned Xi would see the AUKUS announcement as aggression.

    That contrasts with the sentiment emerging from Beijing including its accusations the trio is fomenting an arms race in Asia.

    At a daily briefing Monday, China’s Foreign Ministry spokesman Wang Wenbin said the AUKUS partners had “completely ignored the concerns of the international community and gone further down a wrong and dangerous road.”

    He said the deal would “stimulate an arms race, undermine the international nuclear non-proliferation system and damage regional peace and stability.”

    Peter Dean, director of Foreign Policy and Defense at the United States Studies Centre at the University of Sydney, said the Chinese claims are overblown.

    “If there is an arms race in the Indo-Pacific, there is only one country that is racing, and that is China,” he told CNN.

    The US will sell up to five Virginia-class nuclear-powered submarines to Australia.

    Smaller countries around the region are watching the AUKUS plan with concern that a greater presence in their waters could lead to unintended conflict, said Ristian Atriandi Supriyanto, from the Strategic & Defence Studies Centre at the Australian National University.

    “With more rotational presence of US and UK subs in Australia, there is a greater necessity for China to surveil these units and thereby, increase the likelihood of accidents or incidents at sea,” he said.

    Biden stressed Monday that he wanted “the world to understand” that the agreement was “talking about nuclear power not nuclear weapons.”

    According to a White House fact sheet, the US and UK will give Australian nuclear material in sealed “welded power units” that will not require refueling. Australia has committed to disposing of nuclear waste in Australia on defense-owned land. But that won’t happen until at least the late 2050s, when the Virginia-class vessels are retired.

    Australia says it doesn’t have the capability to enrich it to weapons grade, won’t acquire it and wants to abide by International Atomic Energy Agency (IAEA) principles on non-proliferation.

    The AUKUS plan is an admission by Australia that without submarines that can spend long periods of time at great depths, the country is woefully unprepared to counter China in the Indo-Pacific.

    “It is hugely complex and hugely risky,” said Dunley from the University of New South Wales.

    “But when the original announcement and decision was made in 2021, there were very few good options left for Australia. So I think they’ve come out as well as they could have done,” he added.

    Multiple challenge are posed by a project of this scale, which includes many moving parts with potential knock-on effects to the timeline and cost.

    The deal involves upgrades to ports and fleets, including expanding the operational life of Australia’s Collins-class submarines to the 2040s, to aid in the transition to nuclear.

    “You’re having to take submarines out for quite a significant chunk of time to refit them, and if there are delays or issues that could cascade and you could see issues where Australia actually doesn’t have enough submariners to maintain its current forces of mariners, let alone augment that,” Dunley said.

    As all three countries race to expand their fleets, training enough staff could become a serious challenge, Dunley said.

    The security element of the roles mean the pool of skilled workers is inevitably shallow. Efforts are being made in all countries to entice trainees to a life below the surface of the sea for months at a time – potentially not an easy sell in a competitive jobs market.

    And then there’s the funding.

    The Australian government says it’ll find 0.15% of gross domestic product every year for 30 years – a cost of up to $245 billion (368 billion Australian dollars).

    Max Bergmann, the director of the Europe Program at the Center for Strategic and International Studies, said the deal will ultimately require healthy economies, and all three countries are dealing with cost of living pressures.

    “The UK economy is not doing great. And part of what it will need is a thriving economy, such that it can maintain the level of spending needed,” he told a reporter briefing.

    Xi’s move to allow himself to retain the Chinese leadership for life means he could be approaching his 90s by the time Australia and Britain have launched their new AUKUS fleets.

    By then, the landscape of the Indo-Pacific could be vastly changed.

    Xi, 69, has made it clear that the issue of Taiwan, an island democracy that China’s Communist Party claims but has never ruled, cannot be passed indefinitely down to other generations.

    For now, Australia says it is confident of continued bipartisan support in Washington for program, which will rely on the ongoing transfer of nuclear material and other weapons secrets from the US.

    “We enter this with a high degree of confidence,” Defense Minister Marles said Monday.

    However the risk remains that in future years an inward-facing US leader in the style of former President Donald Trump – or even perhaps Trump himself – could emerge to threaten the deal.

    Charles Edel, senior adviser at the Center for Strategic and International Studies, said the deal was about much more than a combined effort to change China’s calculations about its security environment.

    “It’s meant to transform the industrial shipbuilding capacity of all three nations, it’s meant as a technological accelerator, it’s meant to change the balance of power in the Indo-Pacific, and, ultimately, it’s meant to change the model of how the United States works with and empowers its closest allies.”

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  • Asian markets tumble as SVB fallout fears rattle banking sector | CNN Business

    Asian markets tumble as SVB fallout fears rattle banking sector | CNN Business


    Hong Kong
    CNN
     — 

    Asian stocks fell broadly on Tuesday, dragged down by banking shares, as fears over the fallout of Silicon Valley Bank’s collapse gripped the market despite US government efforts to stabilize the financial system.

    Japan’s Nikkei 225

    (N225)     tumbled 2.19% to post its third straight day of declines. Hong Kong’s Hang Seng

    (HSI)     briefly dropped 2.5%, before trimming losses in the afternoon. Korea’s Kospi lost almost 3%. China’s Shanghai Composite shed 0.65%.

    Banks were the hardest hit sector across the region.

    HSBC

    (HBCYF)     Holdings plunged more than 5% in Hong Kong after the banking giant pledged to inject 2 billion pounds ($2.4 billion) of liquidity into SVB’s UK unit, which it had bought for 1 pound. Standard Chartered Bank sank nearly 7%.

    The sell-off happened despite extraordinary measures by US regulators over the weekend to avert a potential banking crisis following the collapse of SVB. The California-based lender fell with astounding speed on Friday, marking America’s biggest bank shutdown since 2008.

    Investors are now on edge over whether the demise of SVB could spark a broader banking sector meltdown. On Monday, US stocks were mixed, with banking shares taking a hit.

    “Investors fear other financial institutions are sitting on significant unrealized losses on their balance sheets because of markedly higher interest rates,” said DBRS Morningstar analysts on Monday.

    The fear was “irrespective of fundamentals,” they said.

    US Treasury yields were sharply lower on Monday as investors flocked to safe-haven assets. The yield on the 2-year Treasury was briefly down more than 50 basis points, the biggest daily drop in decades.

    “At the moment, markets are speculating on a Fed’s U-turn, but are equally pricing in a greater degree of contagion in the banking sector turmoil, which is ultimately weighing on risk sentiment,” ING analysts wrote in a research note on Tuesday.

    Should the Federal Reserve accommodate market hopes and end its interest rate tightening cycle, there would be ample room for market sentiment to rebound, they said.

    Other Asia Pacific banking shares also fell.

    In Hong Kong, shares in Bank of China (Hong Kong) and Hang Seng Bank fell 3.7% and 1.3% respectively. Pan-Asian insurer AIA Group traded down 4.7%.

    In Tokyo, Mitsubishi UFJ Financial Group, Japan’s biggest bank, lost 8.4%. Sumitomo Mitsui Financial Group and Mizuho Financial Group both dropped more than 7%.

    In Seoul, KB Financial Group and Shinhan Financial Group fell 3.6% and 2.5% respectively.

    In Shanghai, China Merchants Bank dropped 1.2% and China Minsheng Banking Corp retreated by 0.3%.

    In Sydney, Macquarie Group pulled back by 3.1% and ANZ Group was 1.5% lower.

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  • China’s Andon Health says it has full access to funds parked at collapsed lender SVB | CNN Business

    China’s Andon Health says it has full access to funds parked at collapsed lender SVB | CNN Business


    Hong Kong
    CNN
     — 

    China’s Andon Health, a maker of medical devices, says it has full access to funds parked at Silicon Valley Bank, after the US government intervened to backstop all the deposits at the failed lender.

    The Tianjin-based company, which manufactures consumer health devices and supplied Covid test kits to the United States during the pandemic, has cash deposits at SVB worth 5% of its total cash and cash equivalents.

    That amounts to approximately 675 million yuan ($98 million), according to calculations based on its most recent earnings report.

    “Our deposits at Silicon Valley Bank can be used in full and have not suffered any losses,” the company said in a Tuesday filing to the Shenzhen Stock Exchange.

    The announcement comes after the US government took extraordinary measures on Sunday to avert a potential banking crisis following the collapse of SVB. Those measures include guaranteeing that customers of the bank will have access to all their money starting Monday.

    By doing that, US regulators aimed to prevent more bank runs and to help companies that deposited large sums with affected banks to continue to make payroll and fund their operations

    The collapse of SVB, which courted Chinese start-ups, has caused widespread concern in China, where a string of founders and companies rushed to appease investors by saying their exposure was insignificant or nonexistent.

    So far, more than a dozen of firms have issued statements trying to pacify investors or clients, saying that their exposure to SVB was limited. Most were biotech companies.

    SVB, which worked with nearly half of all venture-backed tech and healthcare companies in the United States before it was taken over by the government, has a Chinese joint venture, which was set up in 2012 and targeted the country’s tech elite.

    The SPD Silicon Valley Bank, which was owned 50-50 owned by SVB and local partner Shanghai Pudong Development Bank, said Saturday that its operations were “sound.”

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  • Chinese companies and founders rush to calm investors after SVB collapse | CNN Business

    Chinese companies and founders rush to calm investors after SVB collapse | CNN Business


    Hong Kong
    CNN
     — 

    The collapse of Silicon Valley Bank (SVB), which courted Chinese start-ups, has caused widespread concern in China, where a string of founders and companies rushed to appease investors by saying their exposure was insignificant or nonexistent.

    SVB, which worked with nearly half of all venture-backed tech and healthcare companies in the United States before it was taken over by the government, has a Chinese joint venture, which was set up in 2012 and targeted the country’s tech elite.

    The SPD Silicon Valley Bank, which was owned 50-50 owned by SVB and local partner Shanghai Pudong Development Bank, said Saturday that its operations were “sound.”

    “The bank has a standardized corporate governance structure and an independent balance sheet,” it said in a statement. “As China’s first technology bank, SPD Silicon Valley Bank is committed to serving Chinese science and technology companies, and has always had sound operations in accordance with Chinese laws and regulations.”

    It’s unclear what will happen to SVB’s ownership of the joint venture.

    SVB Financial Group, the parent company of SVB, also has two business consulting firms and one financial services firm in mainland China, according to corporate database Tianyancha.

    Concerns about the failure of SVB have spread around the world, as investors fretted about the broader risks to the global banking sector and any potential spillover effect.

    In an extraordinary move to restore confidence in America’s banking system, the Biden administration on Sunday guaranteed that customers of SVB and Signature Bank, which was closed by regulators, will have access to all their money.

    That action appears to have appeased global markets, with US futures rallying in response and some Asian markets paring earlier losses.

    In China, at least a dozen firms have issued statements since SVB collapsed trying to pacify investors or clients, saying that their exposure to the lender was limited. Most were biotech companies.

    BeiGene, one of China’s largest cancer-focused drug companies, said Monday it had more than $175 million uninsured cash deposits at SVB, which represents approximately 3.9% of its cash, cash equivalents and short-term investments.

    “The company does not expect the recent developments with SVB to significantly impact its operations,” it said.

    Zai Lab, a pharmaceutical firm, announced that its cash deposits at SVB were “immaterial” at about $23 million.

    The closure of SVB “will not have an impact” on the company’s ability to meet its operating expenses and capital expenditure requirements, including payroll, it said.

    Other companies that publicly assured investors included Andon Health, Sirnaomics, Everest Medicines, Broncus Medical, Jacobio Pharmaceuticals, Brii Biosciences, CStone Pharmaceuticals, Genor Biopharma and CANbridge Pharmaceuticals.

    Mobile ad tech firm Mobvista and wealth management firm Noah Holdings said their cash holdings at SVB were “minimal” or “immaterial.”

    Popular selfie app Meitu said it hadn’t held any bank accounts at SVB since 2020. It issued a statement “to avoid any potential public misunderstanding.”

    Ascletis Pharma, MicroPort NeuroTech, Antengene Corp, and Suzhou Basecare Medical Corporation also denied they had any deposits or business dealings with SVB.

    Pan Shiyi, co-founder and former chairman of Soho China, a major Beijing-based property developer, denied he had any money at SVB after reports went viral on social media that he had lost billions of yuan.

    “We never opened an account with Silicon Valley Bank, nor placed a deposit,” he said late Sunday on his Weibo account.

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  • China looms large as Biden makes submarine moves with UK, Australia | CNN Politics

    China looms large as Biden makes submarine moves with UK, Australia | CNN Politics


    San Diego
    CNN
     — 

    President Joe Biden was flanked on Monday by a 377-foot submarine – the USS Missouri – as he announced an accelerated timeline for Australia to receive its own nuclear-powered submarines early next decade.

    But looming much larger was the increasingly tense US relationship with China, which has emerged as a central focus of Biden’s presidency. That relationship has been magnified in recent weeks by a slew of global events, from the dramatic downing of a Chinese spy balloon to the revelation that Beijing is considering arming Russia – all taking place amid Chinese President Xi Jinping’s unprecedented consolidation of power and a growing bipartisan consensus in Washington about the risks China poses.

    US officials readily acknowledge that tensions with China are higher than they have been in recent years and that Beijing’s heated public rhetoric of late is reflective of the state of private relations. It’s why Biden’s multi-pronged China strategy has involved a bid to normalize diplomatic relations even as the US pursues policies like Monday’s submarine announcement designed to counter China’s global influence and its military movements.

    “Today, as we stand at the inflection point in history, where the hard work of enhancing deterrence and promoting stability is going to affect the prospects of peace for decades to come, the United States can ask for no better partners in the Indo-Pacific, where so much of our shared future will be written,” Biden said Monday, standing alongside his Australian and British counterparts.

    The effort to re-open lines of communication with China, especially between each country’s top military brass following the spy balloon incident, has shown no signs of progress, according to a senior administration official.

    “Quite the contrary, China appears resistant at this juncture to actually move forward in establishing those dialogues and mechanisms,” the official said. “What we need are the appropriate mechanisms between senior government officials, between the military, between the various crisis managers on both sides to be able to communicate when there is something that is either accidental or just misinterpreted.”

    Against that backdrop, Biden faces a series of decisions over the coming weeks and months that have the potential to exacerbate tensions further, including placing new curbs on investments by American companies in China and restricting or blocking the US operations of the popular social media platform TikTok, which is owned by a Chinese company. And in Beijing, Chinese officials must soon decide whether to flaunt US warnings and begin providing lethal weaponry to Russia in its war in Ukraine.

    Monday’s update on the new three-way defense partnership between the US, Australia and the United Kingdom is the latest step meant to counter China’s attempts at naval dominance in the Indo-Pacific and, potentially, its designs on invading self-governing Taiwan. Australia will now receive its first of at least three advanced submarines early next decade, faster than predicted when the AUKUS partnership launched 18 months ago, and US submarines like the USS Missouri will rotate through Australian ports in the meantime.

    “The United States has safeguarded stability in Indo-Pacific for decades, to the enormous benefits of nations throughout the region from ASEAN to Pacific Islanders to the People’s Republic of China,” Biden said during his remarks. “In fact, our leadership in the Pacific has been the benefit to the entire world. We’ve kept the sea lanes and skies open and navigable for all. We’ve upheld basic rules of the road.”

    His British counterpart was more explicit, naming China as a cause for concern.

    “China’s growing assertiveness, the destabilizing behavior of Iran and North Korea all threaten to create a world defined by danger, disorder and division,” said Prime Minister Rishi Sunak. “Faced with this new reality, it is more important than ever, that we strengthen the resilience of our own countries.”

    Even before Biden traveled to Naval Base Point Loma in California to herald that progress alongside the British and Australian prime ministers, China was quick to lambast the move as advancing a “Cold War mentality and zero-sum games.”

    That China did not wait for the announcement itself to lash out is a sign of just how closely Beijing is watching Biden’s moves in the Pacific, where the US military is expanding its presence and helping other nations modernize their fleets.

    And it’s another example of Biden’s view of China as the leading long-term threat to global peace and stability, even as Russia’s war in Ukraine consumes current US diplomatic and military attention.

    The first shipment, due in 2032, will be of three American Virginia-class attack submarines, which are designed to employ a number of different weapons, including torpedoes and cruise missiles. The subs can also carry special operations forces and carry out intelligence and reconnaissance missions.

    That will be followed in the 2040s by British-designed submarines, containing American technology, that will transform Australia’s underwater capabilities over the course of the next 25 years.

    Before then, US submarines will rotationally deploy to Australia to begin training Australian crews on the advanced technology, scaling up American defense posture in the region.

    The submarines will not carry nuclear weapons and US, Australian and British officials have insisted the plans are consistent with international non-proliferation rules, despite Chinese protestations.

    The message sent by the announcement is unmistakable: The US and its allies view China’s burgeoning naval ambitions as a top threat to their security, and are preparing for a long-term struggle. Already this year, the US announced it was expanding its military presence in the Philippines and welcomed moves by Japan to strengthen its military.

    “It’s deeply consequential,” a senior administration official said of the AUKUS partnership. “The Chinese know that, they recognize it and they’ll want to engage accordingly.”

    US officials said Britain’s participation in the new submarine project is a sign of Europe’s growing concerns about tensions in the Pacific – concerns that have emerged within NATO, even as the alliance remains consumed by the war in Ukraine. And in conversations with European leaders over the past month, including European Commission President Ursula von der Leyen on Friday, Biden has raised the issue of China in the hopes of developing a coordinated approach.

    The looming question now is whether China will choose to reengage and improve diplomatic relations with the US despite the heightened tensions.

    Successive phone calls and a November face-to-face meeting with Xi have so far yielded only halting progress in establishing what administration officials describe as a “floor” in the relationship.

    Four months after that meeting, progress has largely stalled on reopening lines of communication between Washington and Beijing, once viewed as the primary takeaway from the three-hour session in Bali. Speaking to CNN in late February, Defense Secretary Lloyd Austin said it had been months since he’d spoken to his Chinese counterpart.

    And public remarks from Chinese leaders, including Xi, have begun to sharpen over the past week, a sign the confrontational approach of the past year is not waning.

    Biden and his advisers have largely downplayed the new, sharp tone emanating from Beijing. Asked by CNN on Thursday about the meaning of new rebukes from Xi and Foreign Minister Qin Gang, Biden replied flatly: “Not much.”

    On Monday, US national security adviser Jake Sullivan said a conversation between Biden and Xi would likely occur now that China’s National People’s Congress has concluded and a slate of Chinese officials take up their new positions following the rubber-stamp parliament’s annual meeting.

    “We have said that when the National People’s Congress comes to a close, as it now has, and Chinese leadership returns to Beijing, and then all of these new officials take their new seats, because of course you now have a new set of figures in substantial leadership positions, we would expect President Biden and President Xi to have a conversation. So at some point in the coming period,” Sullivan told reporters aboard Air Force One.

    He said there was no date set yet for a Xi-Biden phone call, but that Biden “has indicated his willingness to have a telephone conversation with President Xi once they’re back in stride coming off the National People’s Congress.”

    Tensions appeared to hit a new level last week after Xi directly rebuked US policy as “all-round containment, encirclement and suppression against us.” Qin, in remarks the next day, defined the “competition” Biden has long sought to frame as central to the relationship between the two powers as “a reckless gamble.”

    “If the United States does not hit the brakes but continues to speed down the wrong path, no amount of guardrails can prevent derailing, and there will surely be conflict and confrontation,” Qin said.

    A senior administration official acknowledged that Xi’s recent rhetoric has been “more direct” than in the past, but said the White House continues to believe that Xi “will again want to sit down and engage at the highest level” now that he has completed his latest consolidation of power.

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  • Biden announces deal to sell nuclear-powered submarines to Australia

    Biden announces deal to sell nuclear-powered submarines to Australia

    President Biden and the leaders of two close U.S. allies formally announced Monday that Australia will purchase nuclear-powered attack submarines from the U.S. to modernize its fleet amid growing concern about China’s influence in the Indo-Pacific region.

    Mr. Biden flew to San Diego for talks with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak on an 18-month-old nuclear partnership given the acronym AUKUS. The three leaders delivered remarks from Naval Base Point Loma at the entry of San Diego Bay, flanked by U.S. sailors with the USS Sterett destroyer in the background. 

    “Today, as we stand at an inflection point in history, where the where the hard work of advancing deterrence and promoting stability is going to affect the prospect of peace for decades to come, the United States can ask for no better partner in the Indo-Pacific, where so much of our shared future will be written,” Mr. Biden said.

    The partnership between the three nations, announced in 2021, enabled Australia to access nuclear-powered submarines, which are stealthier and more capable than conventionally powered vessels, as a counterweight to China’s military buildup.

    Australia is buying up to five Virginia-class boats as part of AUKUS. A future generation of submarines will be built in the U.K. and in Australia with U.S. technology and support. The U.S. would also step up its port visits in Australia to provide the country with more familiarity with the nuclear-powered technology before it has such subs of its own.

    President Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak deliver remarks after the AUKUS summit at Naval Base Point Loma in San Diego, California, on March 13, 2023.
    President Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak deliver remarks after the AUKUS summit at Naval Base Point Loma in San Diego, California, on March 13, 2023.

    LEAH MILLIS / REUTERS


    In a statement before their meeting, the leaders said their countries have worked for decades to sustain peace, stability and prosperity around the globe, including in the Indo-Pacific.

    “We believe in a world that protects freedom and respects human rights, the rule of law, the independence of sovereign states, and the rules-based international order,” they said in the statement, released before their joint appearance.

    “The steps we are announcing today will help us to advance these mutually beneficial objectives in the decades to come,” they said.

    San Diego is Mr. Biden’s first stop on a three-day trip to California and Nevada. He will discuss gun violence prevention in the community of Monterey Park, California, and his plans to lower prescription drug costs in Las Vegas. The trip will include fundraising stops as he steps up his political activities before an expected announcement next month that he will seek reelection in 2024.

    Mr. Biden was also set to meet individually with Albanese and Sunak, an opportunity to coordinate strategy on Russia’s war in Ukraine, the global economy and more.

    The secretly brokered AUKUS deal included the Australian government’s cancellation of a $66 billion contract for a French-built fleet of conventional submarines, which sparked a diplomatic row within the Western alliance that took months to mend.

    China has argued that the AUKUS deal violates the Nuclear Non-Proliferation Treaty. It contends that the transfer of nuclear weapons materials from a nuclear-weapon state to a non-nuclear-weapon state is a “blatant” violation of the spirit of the pact. Australian officials have pushed back against the criticism, arguing that they are working to acquire nuclear-powered, not nuclear-armed, submarines.

    Mr. Biden emphasized that the submarines “will not have any nuclear weapons of any kind on them,” and said the three leaders are “deeply committed to strengthening nuclear non-proliferation regime.”

    “The question is really how does China choose to respond because Australia is not backing away from what it — what it sees to be doing in its own interests here,” said Charles Edel, a senior adviser and Australia chair at the Center for Strategic and International Studies. “I think that probably from Beijing’s perspective they’ve already counted out Australia as a wooable mid country. It seemed to have fully gone into the U.S. camp.”

    Before he departed for California, Mr. Biden spoke about steps the administration is taking to safeguard depositors and protect against broader economic hardship after the second- and third-largest bank failures in U.S. history.

    The president said the nation’s financial systems are safe. He said he’d seek to hold accountable those responsible for the bank failures, called for better oversight and regulation of larger banks and promised that taxpayers would not pay the bill for any losses.

    The president’s daughter Ashley Biden and granddaughter Natalie Biden also traveled with him to San Diego.

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  • China censors women modeling lingerie on livestream shopping — so men are doing it | CNN Business

    China censors women modeling lingerie on livestream shopping — so men are doing it | CNN Business


    Hong Kong
    CNN
     — 

    Donning a sassy piece of silk lingerie, a male model grooves to the beat and forms a heart shape with his fingers during a livestreaming session on Douyin, one of China’s most popular video-sharing platforms.

    His modeling performance is the latest illustration of the kind of entrepreneurial innovation sometimes needed to bypass China’s rigorous internet censorship, a dragnet that can ensnare seemingly innocuous activities – in this case retailers selling women’s underwear online.

    China deploys one of the world’s most stringent censorship regimes, with a track record of blocking out not just politically sensitive information but images of women’s bodies deemed marginally racy.

    Several businesses specializing in selling lingerie through livestreaming have had their sessions cut short after they featured a female model and their brush with internet censorship came to light in January.

    Hence the use of men instead.

    On one of the sales channels, a man is seen dressed in black lingerie, standing next to a mannequin showing a similar outfit, in what appears to be a screenshot of a livestream broadcast on Alibaba

    (BABA)    ’s Taobao Live, a streaming platform for the e-commerce giant.

    In another image, a different male model put on a pink slip dress and silky shawl, accessorized with cat ear headbands.

    In one livestream clip, carried by multiple state media outlets, an owner of an online venture said he was simply trying to play it safe.

    “This is not an attempt at sarcasm. Everyone is being very serious about complying with the rules,” the man, who identified himself as Mr Xu, said.

    The emergence of male lingerie models has caused mixed views online in China, from merriment and annoyance to reluctant acceptance.

    “So what should I do if I want to promote and showcase lingerie in the live broadcast session? It’s very simple, find a man to wear it,” read one comment on China’s microblogging site Weibo.

    A man in a mini slip dress and velvet robe models beside a woman in pajamas in a video posted on Douyin on February 17, 2023.

    Livestreaming sales of products is a multibillion-dollar industry in mainland China, and was given a major boost during the three years of the country’s strict Covid lockdowns that battered many bricks and mortar businesses.

    As of June last year, the number of livestreaming e-commerce users in mainland China is over 460 million, according to the Academy of China Council for the Promotion of International Trade, a body affiliated with Beijing’s commerce ministry.

    A 2021 report by iResearch, a Beijing-based firm specializing in measuring audience growth online, predicted the livestream sector would be worth as much as $720 billion this year.

    Male models are not the only workaround.

    On Douyin, the Chinese domestic version of TikTok, other female models have circumvented the censorship by showcasing the latest style of lingerie on themselves on top of a t-shirt they are already wearing.

    Others displayed the items on mannequins.

    In 2015, China led a crackdown on television shows exposing actresses’ cleavage, forcing some of the most popular costume dramas to zoom in on their faces to avoid getting into trouble with the broadcast authorities.

    Having male influencers promoting female-oriented products is not new in China, either.

    One of the industry’s most successful livestream shopping influencers is Austin Li Jiaqi, who made his name as the “Lipstick King” after selling 15,000 lipsticks in just five minutes in 2018.

    As one of China’s biggest internet celebrities, Li also peddles cosmetics, skincare products and fashion apparel, often applying products he’s selling to his own face.

    Even outside of China, platforms such as Facebook and Instagram have faced criticism for restricting the sharing of images involving partial nudity, especially of women.

    Facebook and Instagram’s parent company, Meta, restricts the sharing of breasts, although it says it intends “to allow images that are shared for medical or health purposes.” But even Meta’s own Oversight Board has called on the company to make its policy less confusing and more gender inclusive.

    YouTube says it prohibits “the depiction of clothed or unclothed genitals, breasts, or buttocks that are meant for sexual gratification,” but it may age-restrict other images or videos involving nudity.

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  • Taiwan says soldier who went missing has been found in China | CNN

    Taiwan says soldier who went missing has been found in China | CNN


    Taipei, Taiwan
    CNN
     — 

    A Taiwanese soldier who went missing last week from an island near the Chinese coast has been found in mainland China, a Taiwan official said on Monday, raising the possibility of a highly unusual defection amid heightened tensions across the Taiwan Strait.

    Speaking to reporters, Chiu Tai-san, minister of Taiwan’s Mainland Affairs Council, said China had notified Taiwan that the soldier, surnamed Chen, is currently in mainland China.

    Chen was reported missing on Erdan island following a roll call, the Taiwanese Defense Ministry said in a statement Thursday, adding it had set up a special task force to locate him.

    Erdan, part of the Taipei-controlled Kinmen islands, is located less than 5 kilometers (3.1 miles) from the Chinese port city of Xiamen in southeastern Fujian province.

    In recent years, Beijing has ramped up economic, diplomatic and military pressure on Taiwan – a self-ruling democracy the Chinese Communist Party claims as its own despite having never governed it.

    China’s People’s Liberation Army (PLA) frequently sends aircraft and warships close to Taiwan, in a campaign aimed at intimidating the island and wearing down its equipment.

    On Monday, Chiu said the Taiwanese Defense Ministry has existing mechanisms to determine whether the soldier should be identified as a deserter.

    He added that the Taiwanese and Chinese sides have communication channels to handle emergency situations and combat crime. “The defense ministry and coast guard administration are actively understanding the relevant progress and situation,” Chiu said.

    CNN has reached out to Taiwan’s Defense Ministry for comment.

    While defection between the two sides has been rarely heard of in recent years, it used to be a more common occurrence.

    In 2002, Taiwan’s then-minister of defense said the Taiwanese military saw 20 cases of defections to China between 1949 and 1989.

    Defectors from both sides were seen as huge propaganda wins – and sometimes rewarded in cash.

    In 1981, China paid a reward of $370,000 to a Taiwanese Air Force major who defected to the mainland with an American-built reconnaissance plane – a valuable asset for the PLA at the time.

    Other defectors would swim between China and Kinmen. The closest distance between the main island of Kinmen and the Chinese coast, at low tide, is less than 2 kilometers (1.6 miles).

    In 1979, Justin Lin, a Taiwanese ground force captain and company commander, swam across that channel to defect to China. He went on to study at the prestigious Peking University and become a high-profile economist.

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  • Swell life: China’s surf scene is heating up | CNN

    Swell life: China’s surf scene is heating up | CNN



    CNN
     — 

    When 19-year-old Zhang Chao decided to take a gap year at university, the digital media major planned to use the short break to work and travel before going back to school.

    But after spending a summer volunteering at a surf shop in Sanya, the capital of China’s Hainan province, everything changed.

    “I really liked surfing and I never went back to school,” recalls Zhang.

    That was nine years ago. Today, he is the proud founder of three Chinese surf brands – Shaka Surf Club, Goofydog Surf Shop and Tempo Restaurant and Bar.

    In recent years, more and more Chinese have been embracing surfing like Zhang.

    “Surfing has been a rising trend in China over the last two years. It’s partly because of the efforts surfers and surf clubs like us have been putting into the scene for the last decade. But it’s also because of the pandemic,” says the surfer.

    “As outdoor activities are preferred (amid Covid restrictions), many people head to the beach and start surfing… People are also becoming less work-oriented and are looking for an alternative way of life they enjoy.”

    Chinese photographer and yoga practitioner Tina Tang agrees.

    “Surfing gives you a sense of freedom because we are always looking at our smartphones and always sitting in the office so our mind is always occupied. So you just bring your surfboard and go to the ocean and you can forget about anything,” says Tang.

    According to state media, Chinese cities with thriving surf scenes have seen tourist spending increases in the first half of 2022.

    Wanning in Hainan province, for example, recorded 46.46% more tourism sales in that period. Guangdong’s Huizhou tourism industry saw an increase of 190%.

    The increased popularity of China’s surfing scene has contributed to that growth, according to the report.

    “Not every city is blessed with conditions needed for surfing. But with those favorable wave conditions, surfing helps diversify a city’s tourism industry and enrich its lifestyle. The surf community is more than just surfing,” says Zhang, who hosts exhibitions and beachside parties at his own surf club and restaurant.

    He says his venues also attract many who don’t surf, but come for the calming views and seaside atmosphere.

    “Surfing is about freedom and happiness – and that is what younger generations nowadays are looking for as well. That’s why surfing has become a more and more popular activity for these younger generations,” says Zhang.

    Here are some of the beaches around China Zhang recommends for different types of surfers.

    Riyue Bay, translated as Sun and Moon Bay, offers warm temperatures and consistent waves year-round.

    Some 80 kilometers from the tourist hotspot of Sanya, Riyue Bay (which literally means Sun and Moon Bay) in Wanning City is a top destination for local and international surfers.

    With warm temperatures year-round and consistent waves, Riyue Bay is home to some of the country’s biggest surf competitions as well as China’s national surfing team’s training center.

    “Riyue Bay is a great central hub for surfers. While there are surf clubs and hostels in the area, more experienced surfers could also easily access some nearby beaches for more challenging wave conditions,” says Zhang.

    Two of the most developed provinces in China for surfing are Hainan and Guangdong.

    While many in Guangdong may head to Xichong Beach in Shenzhen for its convenience, those up for a day trip away from the city should head to Huizhou’s Shuangyue Bay.

    “People always come here for nice seafood or marine culture, also surfing now – it’s pretty new,” says photographer and surfer Tang.

    The crescent-shaped bay, which stretches over eight kilometers long, is lined with beaches and hotels.

    Apart from surfing, there are plenty of other water sports offerings along the beach.

    Zhang recommends heading towards the western end of the bay – Shizidao (Lion Rock) – for better waves.

    Guangdong is a major surf destination in China.

    One of Zhang’s favorite beaches for longboard surfing is Nanyan Bay, about a 30-minute drive north of Riyue Bay.

    “From the shore to where you could start surfing, you’d need to paddle for around 20 minutes. That’s why it’s less popular than other beaches. But if you’re willing to make an extra effort, the beach has great wave energy,” says Zhang.

    Zhang says that Hainan, in general, has many world-class surf spots.

    The surf season peaks from November to March with a good swell every three to four days.

    In the summer, Hainan is also prone to typhoons – which may be another opportunity to surf bigger waves for Zhang and other experienced surfers who will catch the bigger waves that roll in before the storm hits.

    “Because of its name, local surfers call Liu’ao the L.A. of China,” says Zhang. “It really is an amazing spot to surf.”

    A small peninsula in Fujian province, Liu’ao is a quaint fishing town with a population of less than 30,000.

    “In addition to some good quality waves, Liu’ao Beach is surrounded by nature. It is less touched by humans and it is nice to take a stroll along the beach and the hill nearby,” says Zhang.

    There is also an old city wall in town that was built in 1388 and can be traced back to the Ming Dynasty.

    One of the most accessible surf beaches in China, Shilaoren attracts surfers who are willing to brave the cold north.

    Located in eastern Shandong province, Qingdao is famous for its Tsingdao Beer and German-style architecture.

    “We often say that it’s the only surf place in China you can access by subway. I haven’t tried but I’d like to carry my surfboard on the subway, get off and arrive at the beach,” says Zhang.

    “It’s also one of the coldest beaches to surf in China. You could still be frozen even if you wear a hat and gloves to surf.”

    Most surfers in this port city head to Shilaoren Beach, three-kilometer stretch of sand near some of the most valuable pieces of land in the central business district.

    While you can surf all year long in Qingdao, the winter can get cold as temperatures often fall below freezing. This is why most people – with the exception of the hardcore – surf from May to October.

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  • SVB collapse will have limited impact on Asia, but one analyst says it could be a warning sign

    SVB collapse will have limited impact on Asia, but one analyst says it could be a warning sign

    HANGZHOU, CHINA – MARCH 12, 2023 – Photo taken on March 12, 2023 shows the logo of SPD Silicon Valley Bank in Hangzhou, Zhejiang province, China.

    Future Publishing | Future Publishing | Getty Images

    Analysts say the collapse of Silicon Valley Bank is not likely to have a major contagion effect in Asia, but one person says it could be seen as a “warning” — especially for economies that haven’t hiked interest rates aggressively.

    China and Japan have bucked the trend as global central banks hike rates – with the People’s Bank of China keeping its loan prime rates unchanged, while the Bank of Japan maintaining a negative interest rate of -0.1%.

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    On Monday, markets in China traded higher, while Japan’s Topix index led declines in a wider sell-off in Asia’s morning trade. It came after U.S. regulators announced measures to further stem systemic risks from Silicon Valley Bank’s collapse.

    “As for China and Japan, the divergence in monetary policy may not cause a similar crisis but it is a warning for the policymakers in the two influential economies,” Tina Teng, markets analyst at CMC Markets told CNBC in an email.

    Teng added that the reaction in Asian equities – venture fund focused banks, in particular – would largely depend on “how they manage their interest rate risks for those countries that face similar issues.”

    This morning’s announcement by the FDIC and the Fed will go a good way to ring-fencing the fallout from Silicon Investment Banks’ failure, particularly for the broader economy.

    “Credit risks might be the major issue that Asian banks face at the back of a gloomy economic outlook and dampened consumer demands,” she said.

    The latest measures announced by U.S. regulators could act as a method to contain further contagion risk, IG analyst Tony Sycamore said.

    Stock picks and investing trends from CNBC Pro:

    “This morning’s announcement by the FDIC and the Fed will go a good way to ring-fencing the fallout from Silicon Investment Banks’ failure, particularly for the broader economy,” he said, adding that he doesn’t expect the fallout in the region to deepen much further.

    “I expect markets to quickly move on and focus on the broader macro issues this week, including tomorrow night’s inflation report and the upcoming FOMC report,” Sycamore said.

    Major spillover unlikely

    Meanwhile, Moody’s Investors Service said Asian banks are not likely to be affected by the fallout of SVB, given their deposits are mostly in loans instead of Treasurys.

    “If you look at the typical loan-to-deposit ratio in Asia, it’s about 90%, so most deposits are invested in loans,” senior credit officer Eugene Tarzimanov at Moody’s told CNBC’s “Squawk Box Asia.”

    Silicon Valley Bank collapse: Most banking systems in Asia-Pacific are stable, Moody's says

    “Banks obviously do invest in government securities — local bonds, foreign bonds, but that share is not that significant,” he added.

    While a number of companies within Asia’s venture capital and tech start-up sector do have exposure to Silicon Valley Bank, not many have openly admitted to seeing major losses from SVB’s bankruptcy.

    SPD Silicon Valley Bank, a joint venture between Shanghai Pudong Bank and Silicon Valley Bank sought to reassure investors over the weekend and said its operations have been “independent and stable.”

    The bank said in a statement on its website it “has always operated in a stable manner in accordance with Chinese laws and regulations, with a standard governance framework and independent balance sheet.”

    ‘Choosing to overlook’

    Hong Kong markets led gains alongside indexes in mainland China on Monday, with the Hang Seng index gaining over 2%.

    The market is “choosing to overlook” troubles that could arise while taking steps to contain further risk from SVB’s fallout, Hao Hong, chief economist of Grow Investment Group told CNBC in an email.

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    He acknowledged that “the implementation could have hiccups from how best to pledge the now marked-down treasury bond portfolio as collateral to borrow from the special lending facility set up by the Fed – but for now, the market is choosing to overlook these technical details.”

    For China’s growth, he emphasized financial data will remain the leading indicator, and pointed to the economy seeing a record in lending for the first two months of 2023.

    We don't expect SVB's collapse to have a big impact on the broader economic outlook: Goldman Sachs

    While equities continue to see volatility, Goldman Sachs’ chief Asia-Pacific economist Andrew Tilton said the macroeconomic outlook for the region is unlikely to be deeply affected by the collapse of SVB.

    “To the degree that this is addressed relatively quickly by regulators and doesn’t spread to additional entities beyond the ones that have been noted so far, then we’re less likely to see a significant impact on Asia growth outlook,” Tilton told CNBC’s “Squawk Box Asia.”

    “We continue to expect 5.5% growth for China this year, mostly driven by the reopening and probably less sensitive to this particular issue,” Tilton said.

    — CNBC’s Lim Hui Jie and Sumathi Bala contributed to this story.

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  • TikTok could be a valuable tool for China if it invades Taiwan, FBI director says | CNN Business

    TikTok could be a valuable tool for China if it invades Taiwan, FBI director says | CNN Business


    New York
    CNN
     — 

    The Chinese government could use TikTok to control data on millions of people and harness the short-form video app to shape public opinion should China invade Taiwan, FBI Director Christopher Wray told the Senate Intelligence Committee Wednesday.

    Wray responded affirmatively to questions from Republican Sen. Marco Rubio of Florida, the panel’s ranking member, on whether TikTok would allow Beijing widespread control over data and a valuable influence tool in the event of war in the Taiwan Strait.

    “The most fundamental piece that cuts across every one of those risks and threats that you mentioned that I think Americans need to understand is that something that’s very sacred in our country —the difference between the private sector and public sector — that’s a line that is nonexistent in the way that the CCP [Chinese Communist Party] operates,” Wray told Rubio in the hearing.

    Rubio, the top Republican on the Senate panel, argued that TikTok presents “a substantial national security threat for the country of a kind that we didn’t face in the past.”

    Wray’s comments come a day after Gen. Paul Nakasone, head of the US National Security Agency, told the Senate Armed Services Committee that he worried TikTok could censor videos to shape public opinion in a way that threatens US national security interests.

    It’s the latest in a full-court press from US officials to sound the alarm about TikTok’s alleged security risks as Congress weighs giving the Biden administration more authority to address the alleged threat posed by the platform, up to and including banning the app in the United States

    TikTok CEO Shou Chew said this week that the Chinese government has “never asked us for US user data” and the company would not provide it if the government did ask. Chew also said that “misinformation and propaganda has no place on our platform, and our users do not expect that.”

    The company has taken voluntary steps to wall off US user data from the rest of its global organization, including by hosting that data on servers operated by the US tech giant Oracle. The company is also negotiating a possible agreement with the Biden administration that could allow TikTok to continue operating in the United States under certain conditions.

    In a statement this week, a TikTok spokesperson said a US government ban would stifle American speech and would be “a ban on the export of American culture and values to the billion-plus people who use our service worldwide.”

    – CNN’s Brian Fung and Catherine Thorbecke contributed to this report.

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  • The Saudi-Iran détente and its regional implications

    The Saudi-Iran détente and its regional implications

    On March 10, Saudi Arabia and Iran announced an agreement to restore bilateral relations. That’s good news.

    The deal was conceived out of need and out of desire: The Saudi-Iranian need to end a conflict that has proven costly and toxic to both nations and disastrous to the Middle East, and the Chinese desire to play matchmaker, to fill the strategic void left by the United States and Russia, and to demonstrate its credentials as a trustworthy global partner.

    The fact that the agreement was signed after two years of difficult negotiations holds promise. But do not expect the long archrivals to turn archangels after normalising their diplomatic relations. There remains a great deal of distrust and too many points of friction to tackle and resolve.

    With no love lost, the renewed Saudi-Iranian relationship may turn into a marriage of convenience driven by national interest and shaped by political and economic calculus. Or, it may become a marriage of inconvenience – one that is eroded by divergent ideological and regional agendas.

    Riyadh and Tehran have agreed to reactivate the cooperation and security agreements signed in 1998 and 2001, respectively, but a return to the status quo ante of the 1990s is challenging if not improbable after a dozen years of hostility.

    Indeed, their proxy conflicts have been utterly devastating with their sectarian overtones, undermining the two countries’ security, crippling their economies and tearing their societies apart. The more they interfered the more Yemenis, Syrians, Iraqis, Lebanese and Bahrainis suffered.

    That’s why the way forward is not the way back for the two regional powers. In light of the new and complicated regional order – or rather disorder – they helped create, the two nations must chart a new and sustainable path forward that serves their and their neighbours’ national interests.

    This begins with refraining from intervening in each other’s affairs, wasting fortunes on undermining other Middle Eastern societies, and in the process, engaging in a costly arms race to the bottom.

    Like other peoples, Iranians and Saudis would want their leaders to focus their attention on domestic affairs, not foreign bravados, pursuing democratic harmony at home instead of spreading anarchy abroad.

    A new way forward is an opportunity to lower tensions, mitigate the damages, and compensate neighbours for the harm done to them. It is indeed morally incumbent upon the two oil-rich nations to help Syrians, Yemenis and other victims of proxy conflicts rebuild their shattered lives. China and the West should also help.

    Beyond that, I believe it is in everybody’s best interest if the protagonists try a hands-off approach to regional affairs, especially as their regional overreach allowed foreign powers to exploit and aggravate their conflict.

    Indeed, Riyadh and Tehran must now take a common, firm stand on foreign interference, especially Western support for Israel’s colonialism and apartheid – predictably the only country to openly oppose the new Gulf détente, which it is, no doubt, determined to sabotage.

    They must also reject all attempts by global powers to intervene directly or through proxies in the Middle East. That includes China.

    Beijing, which mediated between Riyadh and Tehran and hosted the final celebratory handshake, has emerged as the biggest winner of the new deal. It will gain greater credibility and prestige as a responsible global player, having helped resolve a complicated conflict in a tough region considered part of the US area of influence.

    Moreover, as the sponsor, China will probably want to stay involved in order to see through the reconciliation and normalisation process, which gives it greater access to the oil-rich region it needs to fuel its economy and military in the long run. In other words, unlike other regional mediations that came at a cost to their sponsors, this could prove profitable to China, and at the expense of its global rival, the US.

    The Biden administration has welcomed the de-escalation in the Gulf, which it says could also help put an end to the war in Yemen, but it is unable to hide its anger and disappointment. This is especially so since Beijing succeeded in championing a diplomatic breakthrough in the Middle East after Washington tried to block its mediation between Russia and Ukraine.

    The US’s grinning mouth fails to hide its teeth-grinding, as China undermines US plans to expand the so-called Abraham Accords to include Saudi Arabia, or to impose a new nuclear deal on Iran through sanctions and regional pressure. Although it is too early to tell, the Chinese-sponsored agreement may well scuttle the American-Israeli scheme of polarising the region in favour of a pro-Israel and anti-Iran bloc.

    But then again, Saudi Arabia is not about to turn its back on the US or switch alliances. It is far too dependent on Washington in military and economic affairs. But like other regional actors, large and small, Riyadh is also going hybrid, merely adding one more relationship to its diplomatic mix, aimed at securing its own interests first and foremost.

    So will Iran, which has already developed relations with Russia and China. It may well add the US to the mix, if or when the latter agrees to lift the sanctions and strike a fair nuclear deal.

    In other words, the Saudi-Iran deal is an indication of a changing region and shifting geopolitics.

    Welcome to the new Middle East, where states are acting more independently of global powers, shaping and balancing relationships and alliances, instead of being shaped by them.

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