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Covid Conundrum, YMTC, PRC-India Disputes & Bhutan’s Colonization
News Brief (12/18)
VERMILION: China’s reopening is happening at breakneck speed. Over the past two weeks Covid was downgraded to common cold status (CN), testing booths were removed from major cities, the national health tracker for Covid was shut down, and most other Covid restrictions were either removed or loosened. In theory this is good news, as many of these restrictions spurred the protests that occurred in late November and they were seen as the primary drivers behind China’s economic slowdown. However, despite the lack of official data, news reports and social media commentary indicate that Covid cases are rising at an unprecedented rate. The CCP will likely try to push through this disruption while signaling to foreign governments and businesses that Covid is under control. There is a chance that national civil unrest returns to China within the next three months as the consequences of this hasty opening lead to overstressed hospital capacity and increased deaths. There will almost certainly be at least sporadic local protests. It remains to be seen if protest activity will be moderated by fear of Covid contagion (which the CCP may be relying on). This will increase the pressure on the CCP to accept Western vaccines.
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Covid-19 is spreading rapidly through China’s biggest cities, leading to widespread medicine shortages and exposing Beijing’s lack of preparation after authorities reversed strict pandemic controls.
Residents of Shanghai, Shenzhen and other cities reported pharmacies have sold out of fever medicine and Covid tests, while social media images contrast long queues outside Covid clinics with otherwise empty streets.
The outbreak has brought normal life to a halt just a few weeks after Beijing abandoned zero-Covid controls — which included lockdowns, quarantines and mass testing — with little forewarning.
In many cities, residents were sick or staying at home to avoid infections. Shanghai and several other cities announced they would move classes online for most students starting Monday.
In Shanghai, Lindsay Feng, a tech worker, noted eight of 21 neighbours in her apartment complex had contracted Covid in the past 10 days. “My high fever is gone, but I’m swallowing razor blades now,” said Feng, who tested positive at home on Saturday.
In the southern city of Shenzhen, a pharmacy owner said his store had run out of cold and fever medicine. “I have been asking for supplies for two weeks, but the factories are still postponing my orders,” he said, adding he planned to pick up any supply himself when it became available. “There are no drivers . . . they are all testing positive.”
Covid infections are surging in Beijing, disrupting official government work and keeping people at home after authorities made an about-turn in their strict policy of managing virus cases.
The National Bureau of Statistics said it will cancel a monthly press briefing scheduled for Thursday in Beijing, where it was due to release key economic indicators for November.
Economists expect the figures to show a worsening in the economy in November even before the current Covid surge. Growth is expected to slow to just 3.2% this year, which would be the weakest pace since the 1970s barring 2020’s pandemic slump.
BEIJING—One of Beijing’s designated crematoria for Covid-19 patients has been flooded with dead bodies in recent days as the virus sweeps through the Chinese capital, offering an early hint at the human cost of the country’s abrupt loosening of pandemic restrictions.
Beijing Dongjiao Crematory, on the eastern edge of the Chinese capital, has experienced a jump in requests for cremation and other funerary services, according to people who work at the compound.
“Since the Covid reopening, we’ve been overloaded with work,” said a woman who answered the phone at the crematorium on Friday. “Right now, it’s 24 hours a day. We can’t keep up.”
China has reported no Covid deaths in Beijing since authorities announced four deaths between Nov. 19 and 23. The information office for China’s cabinet, the State Council, didn’t immediately respond to a request for comment sent late on Friday.
The woman said that Dongjiao Crematory, which is operated by Beijing municipality and which the National Health Commission has designated to handle Covid-positive cases, was receiving so many bodies that it was conducting cremations in the predawn hours and in the middle of the night. “There’s no other way,” she said.
She estimated that there were roughly 200 bodies arriving each day at the crematorium, from 30 or 40 bodies on a typical day. The increased workload has taxed the crematorium staff, many of whom have become infected with the fast-spreading virus in recent days, she said.
VERMILION: The CCP solution to Covid is to simply stop testing and stop attributing deaths to Covid.
The coronavirus sweeping across China is causing widespread business disruption as staffing shortages threaten to close down factory production lines and truck drivers fall ill, bringing chaos to supply chains.
The Omicron variant of the virus has begun to run rampant through several big cities since the sudden U-turn on president Xi Jinping’s former zero-Covid policy of containment earlier this month. The surge in infections is largest in the capital Beijing, where more than half the 22mn population is infected, according to some estimates. Many office workers have begun to work from home but some factories are becoming thinly staffed as workers call in sick. Business owners and executives said this was causing increasing disruption to production and supply chains.
Companies have been left with no direction on how to handle the sudden surge in cases, after previously operating under strict guidelines handed down by local governments. Factory bosses are now either loosening all controls or isolating workforces to keep production lines functioning.
A manager at a car assembly plant in the northern province of Hebei said his group plans to reinstate the “closed loop” system, whereby staff live and work on-site during Covid outbreaks, in order to keep production going while avoiding catching the virus.
“We will have no workers left otherwise,” he said.
YMTC (Yangtze Memory Technology Co., Ltd.)
VERMILION: YMTC’s addition to the entity list marks another death blow to US-China tech coupling. Apple spent roughly 4 years working with YMTC to build up their 3D NAND manufacturing capabilities. The Apple leadership team dramatically underestimated the geopolitical risk of working with Chinese suppliers at the higher end of the value spectrum. Although Apple announced they were freezing cooperation with YMTC in October, YMTC was slated to produce the 3D NAND memory for approximately 40% of Apple’s iPhones globally. Apple and other US companies are facing increasing pressure to remove Chinese firms from their supply chains, which they are increasingly doing.
YMTC, long in the crosshairs of the U.S. government, was added to the list over fears it could divert American technology to previously blacklisted Chinese tech giants Huawei Technologies Co Ltd [RIC:RIC:HWT.UL] and Hikvision (002415.SZ). The move, laid out in the Federal Register, will bar YMTC's suppliers from shipping U.S. goods to it without a difficult-to-obtain license.
As the Chinese government seeks to remove barriers between its military and civilian sectors, "U.S. national security interests require that we act decisively to deny access to advanced technologies,” Assistant Secretary of Commerce for Export Administration Thea Kendler said in a statement.
The Chinese embassy in Washington said the United States was engaging in "blatant economic coercion and bullying in the field of technology," undermining normal business activities between Chinese and American companies and threatening the stability of global supply chains.
"China will resolutely safeguard the lawful rights and interests of Chinese companies and institutions," it added.
Washington announced the chip export restrictions in early October, without warning, to thwart China’s ability to stockpile chips of potential military use. These include a ban on high-end semiconductors and chip-making technologies with potential dual civilian and military applications, prohibitions against US citizens working on Chinese practices and expanded trade blacklists of Chinese companies.
On Thursday, Washington added Chinese memory chip maker Yangtze Memory Technologies Company (YMTC) and 35 other Chinese players in the artificial intelligence chip sector to the list, effectively blocking their access to critical technologies.
The US is also pressuring the Netherlands and Japan to add their own restrictions on cutting-edge manufacturing equipment, even as it faces some resistance.
When the US introduced the export controls on October 7, it also placed more than 30 Chinese companies, including YMTC, on the “unverified list” of entities for which the US has been unable to conduct end-user checks to make sure American technology is not being diverted for unauthorised uses. At the time, it set a 60-day window for companies to allow the US to conduct investigations or face the threat of being on the entity list.
Alan Estevez, the top commerce department official for export controls, last week said China had relented and was allowing the inspections of some companies after a long period of no co-operation. He said the US was “seeing better behaviour” from China’s commerce ministry, which oversees end-use checks for Chinese companies. But the US commerce department at the time declined to say how many companies were co-operating.
Michael McCaul, a Republican lawmaker who is expected to chair the House foreign affairs committee from January, said he had been pressing the commerce department for a year to put YMTC on the entity list.
“There is no doubt it should be on the entity list with the strictest licensing policy possible,” he said. “But YMTC is one of many companies that is modernising the Chinese Communist party’s military, and [the commerce department’s bureau of industry and security] needs to aggressively move forward with more listings — and getting our partners and allies on board.”
PRC-India Disputes & Bhutan’s Colonization
VERMILION: Along the Himalayan Front, China continues to make significant and strategic positional gains in the face of lethargic Indian resistance from the Siliguri Corridor. The current flare up you’ve heard of in the news is occuring in the Eastern sector of China and India’s border, which encompasses the Himalayan country of Bhutan. Since 2015, China has established tens, if not hundreds, of Xiaokang (小康). These are small villages linked by infrastructure given the euphemistic title “little prosperous villages.” Most of these villages are situated entirely within the Kingdom of Bhutan’s territory. Unfortunately, Bhutan has one of the weakest military forces in the entire world, leaving Thimphu unable to respond.
China’s Xiaokangs are slowly spreading through Bhutan to the Indian side of the border near Doklam. This will eventually give China a commanding position on the plateau of Doklam, overlooking the Siliguri Corridor. This corridor is the very thin and vulnerable valley that connects India to its Northeast territories. It also acts as Bhutan’s main logistics route. The Doklam plateau to Siliguri valley junction is probably the most strategic area in the entire Himalayas.
Ultimately, this is Beijing’s South China Sea playbook on steroids. First, physically control an area with non-military forces. Second, claim it is for peaceful purposes based on ancient territorial claims. Third, heavily militarize the disputed area to push out all other claimants. Fourth, expand claims to the periphery of the just militarized zone. In the Himalayan context, this behavior is worse because China is executing their plans against the territory of a sovereign nation.
The PLA was targeting the Indian outpost in the contested area called Yanki, a part within the Yangtse area. Parts of Yanki are claimed by both sides as the perception of the LAC varies on ground. There are multiple such disputed points along the 3,488-km-long LAC. The Indian Army post at Yanki was attacked by some 300-strong unit of the PLA and it was not a routine patrol, sources told The Tribune. The Indian outpost faces Chinese posts that are located some 1,000 metres away. The attempt was to dislodge the Indian side from Yanki, sources said.
The incident happened just days after China criticised joint military exercises involving the US and India a mere 100km (60 miles) from its disputed border with India. Beijing called the recent operation a violation of two border agreements signed between China and India in 1993 and 1996.
In response, Elizabeth Jones, the US Charge d’ Affaires in India, said the joint military exercises were “none of their [China’s] business”.
The Line of Actual Control, the 3,200-km de-facto border between the two Asian giants was created after the 1962 Indo-China war. Troops on both sides have adhered to long-standing protocols to refrain from firearms use. Since 2o06, the two countries have patrolled the area up to their claim lines, the Indian army said.
However, tensions in the area have run high since the two sides engaged in deadly fist fights in the Galwan Valley of the Ladakh region near the China-controlled Aksai Chin region of Tibet. In June 2020, at least 20 Indian and four Chinese soldiers died.
Last month, Indian Army Chief Gen. Manoj Pande said the “situation was stable but unpredictable”. He accused China of not reducing its forces at the LAC despite agreeing to do so in September.
The incident occurred on Dec. 9 in the Tawang sector of India's northeastern Himalayan state of Arunachal Pradesh, which borders China's south and is also claimed by Beijing.
The Indian troops "illegally crossed the line to block" a routine patrol of Chinese border troops, a spokesperson from the Western Theatre Command of China's People's Liberation Army (PLA) said on Tuesday.
"We urge the Indian side to strictly control and restrain the front-line troops, and work with China to maintain peace and security on the border," the spokesperson said.
An Indian defence source told Reuters patrolling teams from both sides came face-to-face at one of the peaks there and that in an ensuing hand-to-hand fight, some soldiers fell on the rocky surface and injured themselves. Two other sources said around half a dozen Indian soldiers suffered minor injuries.
Not Enough Hours in the Day Links:
China’s enforcement of customs rules unfair to Taiwan: COA - Focus Taiwan
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